Blog

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.

If you want to know more, please get in touch.

What you get

Promotional Intelligence

2017 Week 33

Non-food retailers on promotion this week 67%
Equivalent for same week last year: 60%
  • This week our headline index has remained unchanged. This a major surprise, and represents the biggest YoY trend deviation we have seen this year
  • Previous deviations (ie Easter) are explained by timing. This deviation is all about a number of retailers extending their Summer Sales versus last year

  • Fashion is the major driver of this change. Last year, Week 33  saw a significant ending of Summer Sales, down to 58% from 65% the week before. This year, the steady return to full price seen recently came to an abrupt halt.
  • This has not translated to related sectors. Department stores and footwear both continued to return to full price.

  • Will the trend close the YoY gap next week? With demand fragile and consumer confidence brittle, extending sale periods may well become increasingly attractive.

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

Promotional Intelligence

2017 Week 32

Non-food retailers on promotion this week 67%
Equivalent for same week last year: 66%
  • This week’s tracker is down to 67%, continuing to follow last year’s pattern with just 1% point difference.
  • Despite the material price inflation being imported into the UK market, non-food retailers are mostly unable to kick the promotional habit.

  • It’s worth underlining the fact that two thirds of all our non-food retailers are still on sale – only a tiny (less than 5%) are actually designed to be this promotional.
  • Department stores, fashion and footwear all posted reduced promo indices this week. However, personal care and hard goods like electrical and DIY have all moved in the opposite direction.

  • Many retailers are desperate to kick the discount habit. Very few have the will or brand strength to do so.
  • Our data reflect a market where the majority are prisoners of their promo stance 12 months ago. We see no prospect of material deviation this year from the pattern of 2016.

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

Promotional Intelligence

2017 Week 31

Non-food retailers on promotion this week 71%
Equivalent for same week last year: 70%
  • More Summer Sales have ended, taking the headline index down from 74% last week to 71% this week

  • Next’s price integrity remains rock solid. Summer Sale lasts 2 weeks – 29 and 30 every year.
  • The new promotionally disciplined M&S began its Summer sale Week 29 and is still running – last year’s spanned 4 weeks and this year looks like a repeat

  • Looking forward, we expect promos to continue tracking last year’s very closely

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

Promotional Intelligence

2017 Week 30

Non-food retailers on promotion this week 74%
Equivalent for same week last year: 72%
  • Summer Sales have started to turn down, after 4 consecutive weeks at 78%
  • Imported price inflation is having no impact on promotions, with 2017 tracking last year almost exactly

  • Most sectors have seen falls this week, albeit of relatively modest proportions
  • Meanwhile, some notable retailers have gone back on sale this week including John Lewis, Top Man, H&M, Superdry and WH Smith

  • With the vast majority still running Summer Sales the return to full margin has only just begun. For many, it will never happen
  • The very tight correlation with last year is established. The chart above maps out clearly the shape of promotional activity over next 4 weeks. The key sector where promotions will end over the coming weeks is fashion, still up at 75% of retailers on discount

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

international – usually a loss strategy

American Eagle (AEO) has announced it is pulling out of the UK. I’m not at all surprised and had severe doubts it could succeed here, writing here at the time. There is a disconnect between perception and reality when it comes to international retailing, and this very fact is at the core of its allure. International retailing in and of itself is regarded as a growth strategy. History actually shows that the overwhelming majority of international retail ventures are in fact a loss strategy.

The record of US retailers coming to Britain and failing is long. The current crop shows little sign of changing this trend. AEO has already announced. Forever 21 is downsizing as fast as it can. JCrew is losing lots of money here and so too is Victoria’s Secret. Banana Republic has said its goodbyes and whether Gap has ever made any money in its almost 30 years in the UK is doubtful. By the way, our record in the USA is no better and very few brands have made it there.

Our market cannot possibly support all the brands it currently has. Anyone new entering has to be truly different and have genuine local market understanding behind it. So retailers like Inditex and H&M both tick these boxes. So too does Fast Fashion’s Uniqlo. And Primark is showing that it is possible to successfully export retail, even though it is actually an Irish business so we can’t really count it anyway. These are exceptions. History shows that international growth is very high risk, and it needs to be viewed as such.

** We advise retailers on strategy and analytics. We also track promotional activity across the UK’s key retailers. Get in touch for details admin@richardtalksretail.co.uk

Sign up today for exclusive access to world-leading expertise in the retail sector.