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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.

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

What you get

Christmas shaping up?

Last week saw the first announcement of Christmas on Oxford Street bunting. Selfridges launched its Christmas shop back in July – 147 before the Day itself. So what will trade be like this year? Everything is measured year-on-year so one has to look at 2016 to start.

The ONS says Christmas 2016 boomed. Year-on-year sales by value were up a massive 6.8% (just 0.1% inflation) to give the best Christmas increase for a generation. Don’t worry if this sounds seriously at odds with your own company’s experience – I don’t believe the figures either! The ONS retail sales data are often at odds with reality, or anecdotal evidence. What is clear however is that last year followed a particularly weak 2015 which in turn followed an unspectacular 2014. So while the reality is that records were not close to being broken in 2016, the comparatives were very weak and last year was probably up 3.00 – 3.50%.

ONS data shows 2017 year-to-date sales by value averaging 4.6%, or 2.5% once inflation is stripped out. Again, best treated with a large pinch of salt. However, interest rates are likely to be on the rise finally and although the increase will be very modest, I’m not sure the impact on sentiment will be. Many younger consumers have only lived with minuscule interest rates and have taken on quite a bit of very cheap debt. Brittle consumer confidence coupled with almost unprecedented political uncertainty encourage caution.

Last year’s demanding comparatives will make this Christmas very tough, with little genuine growth around. Last year, Christmas week saw 88% of non-food retailers on sale. With sales growth thinner on the ground it is hard to see this not being repeated. Christmas will certainly not be cancelled, but with rising rates, falling confidence and discounts almost everywhere, it will disappoint many retailers.

** 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

Promotional Intelligence

2017 Week 40

Non-food retailers on promotion this week 60%
Equivalent for same week last year: 67%
  • More retailers went on sale this week, driving the headline non-foods promo index up to 60%, from 57% last week.

  • Most sectors post lower YoY promotions this week. Exceptions are personal care and footwear, both with higher promotional activity.
  • Among retailers going back on sale this week are John Lewis, TopShop, River Island and Whistles

  • The next few weeks are critical, leading up to Week 46 and Black Friday.
  • Last year 86% of non-food retail was on sale for Black Friday, pulling forward Christmas business and ensuring a heavily discounted Xmas trading season simply to shift stock.

**  We have detailed data by sector and company over the past two years. For more information get in touch at admin@richardtalksretail.co.uk

Promotional Intelligence

2017 Week 39

Non-food retailers on promotion this week 58%
Equivalent for same week last year: 64%
  • Last week we correctly called the bottom of the lower discounting trend (albeit still at 50%) and this week’s headline index is up at 58%, en route to higher ground

  • Fashion and department stores this week are trading more strongly versus week 39 last year and this has driven a lower trend year-on-year …
  • … nevertheless, both sectors posted strongly increased promos this week

  • Last year’s trend is points the likely way forward. The promo index will hit around 65% next week, powered by more fashion and department stores returning to promotions
  • However, it is worth noting that fashion is markedly lower year-on-year. This week’s milder weather will have hit Autumn sales – next week’s fashion index may reflect how badly.

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

Promotional Intelligence

2017 Week 38

Non-food retailers on promotion this week 51%
Equivalent for same week last year: 56%
  • The headline index remains unchanged versus last week but importantly, continues to track below 2016 after 4 weeks being above.

  • Sectors like department stores, home furnishings and DIY all posted discounting declines but fashion increased a little on last week
  • While the value and middle market sectors have gone up, the headline index is driven down by a strong reduction in premium sector promos

  • We expect a clear rise in next week’s index, driven particularly by fashion retailers, supported by department stores

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

Promotional Intelligence

2017 Week 37

Non-food retailers on promotion this week: 51%
Equivalent for same week last year: 53%
  • This week’s index has dropped below the YoY comparison for the first time since mid-July.
  • The headline index has not dipped below 50% since the end of April

  • Fashion returning to full margin continues to drive promotions down. At 41%, this is the second lowest posted this year, after Week 17
  • Department stores, footwear and stationery have also recorded lower discounting.

  • This week is likely to be the low point. We expect promotions to start picking up over the coming weeks as we move into the Autumn.
  • Key sectors like fashion and department stores will move back on promotion, repeating their 2016 promotional calendars

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

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