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Retail has always been a highly dynamic industry, intensely competitive and fighting for a share of the wider consumer spending pot. This is an industry used to dealing with a constant diet of change. However, the change we are seeing today is far more profound than anything the past has thrown up. We are now seeing by far the most challenging period in retail history. A reshaping of the industry’s structure and economics is unfolding, and most of the real change is yet to happen.

Richardtalksretail is focused on analysing this change, anticipating the implications, and mapping how the key players across the various sectors are dealing with it. The regular Blogs in this public section of the site are a taster of the much more detailed analysis and forecasts in the premium section, reserved for subscribers.

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Monthly Archives: June 2017

Promotional Intelligence

2017 Week 26

Non-food retailers on promotion this week 78%
Equivalent for same week last year: 80%
  • Week 26 has delivered exactly as forecast, as Summer Sales dominate
  • Modest price inflation is coming through but most of the industry needs to discount to attract footfall
  • This completes H1 2017 with an average index of 63%, versus 66% H1 2016.

  • The minority on full price this week include Selfridges, Harvey Nicks, Boots and Dunelm
  • Early Summer Sales exits this week among premium players with an index down from 76% to 67%

  • The long Summer Sales of last year are set to be repeated. Only the strongest seem able to ignore the herd
  • Week 28 is the target for some to move back to full price. Even then, the index will reduce modestly week by week.

** We track promotions daily by sector and company to support promotional optimisation programmes – for details contact admin@richardtalksretail.co.uk

Promotional Intelligence

2017 Week 25

Non-food retailers on promotion this week: 77%
Equivalent for same week last year: 79%
  • Our predicted significant hike in promotions this week proved to be spot on
  • Last week’s index rise is eclipsed this week, going from 63% to 77%

  • Week 25 sees major hike driven by 35 more major retailers launching Summer Sales
  • This week, all the country’s leading department stores are on sale, while fashion and footwear both shot up to 75%
  • One of the biggest increases is in home furnishings where this week, 90% of major retailers are running a sale

  • The four week outlook is very clear: the plateau at around (or just below) 80% of all non-food retailers has been reached
  • By Week 28, we will see retailers begin to move back to full price – how soon this happens will be a good reflection of the strength of current trading

** We track promotions daily by sector and company to support promotional optimisation programmes – for details contact admin@richardtalksretail.co.uk

Amazon, Whole Foods, and way beyond

The significance of Amazon’s deal to buy Whole Foods goes way beyond the deal itself. I have been discussing how and where the company would adapt its tried and tested model in order to crack the food market – it was clearly not going to achieve this by simply applying the standard model. So this is part of the answer. And it demonstrates an ability to be self-critical, acknowledge a weakness and how it might best be addressed, and act.

Owning Whole Foods and a relationship with high frequency customer engagements will be transformative. The opportunity to both serve existing customers remotely, and new customers with access to a store is important. But so too is the broader possibility of consolidating food with non-food deliveries and its positive impact on fulfilment economics – already largely unmatched but this raises the ante further in the medium term. How will any other retailer match Amazon’s fulfilment service without damaging its own economics?

A more subtle message from this deal is around physical shopping and the often asked question: does the store have a future? Well clearly Amazon thinks so, and they have been the number suspect behind the death of shops. A vote of confidence from what might have been thought the most unlikely source.

One last point. Food is the largest retail market, and next comes fashion. Like food, really successful selling of clothing requires a totally different approach to Amazon’s traditional model. How long before some strategic fashion acquisitions accelerate Amazon’s takeover of clothing too?

Promotional Intelligence

2017 Week 24

Non-food retailers on promotion this week: 63%
Equivalent for same week last year: 61%
  • Week 24 has produced the sharpest rise in non-food discounting so far this year
  • At 63%, the index is at it highest since Week 5 and the end of the New Year Sales

  • As the chart above shows, 2017 continues to track last year very closely
  • Fashion, footwear and department stores have lead the way with some 75% of retailers going on sale this week coming from one of these 3 sectors
  • By market position, premium retailers have been by far the most active in launching price promotions this week

  • The very close tracking of last year’s promo index makes the likely trajectory over the coming weeks and months very clear
  • Next will see another significant hike in promotions, taking us up towards the 80% levels of last year

** We track promotions daily by sector and company to support promotional optimisation programmes – for details contact admin@richardtalksretail.co.uk

Promotional Intelligence

2017 Week 23

Non-food retailers on promotion this week: 53%
Equivalent for same week last year: 57%
  • Headline non-food promos fell 7 points, down from 60% in week 22 but …
  • … still no sign of price rises coming through

  • This year continues to track 2016 very closely
  • Sharp increase expected in next few weeks as Summer Sales kick in

  • Most sectors down (7) and majority of rest unchanged (5)
  • Footwear is the exception – we expect to see a significant increase in footwear promotions next week

** We track promotions daily by sector and company to support promotional optimisation programmes – for details contact admin@richardtalksretail.co.uk

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