The arrival of sunshine over the past couple of weeks was greeted by some as the panacea for all of retail’s woes.
However, while DIY retailers and fashion specialists got a long-awaited lift, this morning’s ghastly figures from John Lewis show that the sunshine is a double-edged sword.
Department stores always do less well when the weather is good. When it’s glorious outside, who wants to spend all day in a windowless mausoleum? Having been starved of sun for so long, it was inevitable that the first warm spell in ages would mean a particularly pronounced hit for those retailers that struggle in good weather.
John Lewis was down 4.3 per cent overall in its worst week in recent memory, but if you strip out the performance of online and the refurbished Oxford Street store, the showing would have been much worse. The real horrors are its stores in the biggest shopping centres: Bluewater plummeted 19.6 per cent, Cribbs Causeway was down 15.7 per cent and the Trafford Centre fell 14.5 per cent.
And that’s significant because, if John Lewis is doing badly in the huge regional centres, it’s hard to believe that others aren’t doing abysmally, too. The big centres prospered during last year’s awful summer as people took shelter from the rain, so the stores within them will be up against tough comparative numbers this year. They’ll be hoping today’s gloomy weather persists for a while.
The reality is that, while a bit of sunshine might have released pent-up demand for summer fashion and barbecues, it doesn’t change the fact that shoppers are cautious about spending because they are feeling much worse off.
The chief executive of a major retailer told me a story last night, which summed up the consumer mood. He said his wife took her Mini to the petrol station to fill it up and was shocked when the bill came to a staggering£54. “If we’re noticing it, what must the average person in the street be feeling?” he asked me. And until that feeling improves, retailers will continue to suffer.
Retail Week reports this morning that MFI is axing a third of its central staff. Sources close to the business, owned by Merchant Equity Partners, claim it is beating the generally dismal home decor market and is certainly taking an aggressive approach to delivering strong performance – whether that be the helping the bottom line through job cuts or the top line through an unprecedented five-year interest-free credit promotion.
MFI’s big problem, though, is its customer service. It has always been its Achilles heel and anecdotal evidence from several people who have bought from the company in recent months suggests that it is worse than ever. Chief executive Gary Favell needs to make sure that taking the axe to staff doesn’t make a bad situation worse.