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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What you get

Current trading and retail trust

Black Friday and Cyber Monday have gone. Now retailers are asking consumers to come back and buy for Christmas. The body language of stores out there says everything. With 66% now on sale – a totally unprecedented number – the reality is beginning to emerge. After a 12 month diet of more or less permanent price promotions shoppers are tired, and confused. They no longer know whether any given price, even if it has already been cut, will be cut further This is bound to impact a) buying behaviour and b) trust in the retailer.

This will have a material impact on performance. First, Black Friday turned out to be more online than anticipated. However, substantially higher store costs have still been incurred. And so too will higher costs than budgeted in order to fulfil increased online sales. Cost of sales online are higher than in store, so there will be a direct impact from this alone. Then there are returns. I suspect returns will be even higher than usual online, so whatever early indications of Black Friday sales might be, they will net out considerably lower.

As I said in my opening paragraph, we can already see some of the implications of this in the incredibly high discounts out there. The vast majority of mark downs are current season stock, and there is lots of it. I have been warning for some time about next year’s tightening industry economics and trading will be materially more difficult. Many retailers will be entering 2016 with too much stock and too little cash, and that’s before the new economic screw starts to tighten.

** How do you see 2016? How confident are you in your forecasts? Did you get 2015 right? Get an informed, objective second opinion –

BF hype, no compensation for margin hit

We are now in the period when PR and wishful thinking rule the day. After the trading performance damaging Black Friday and the now redundant Cyber Monday, we are being told how fantastic it all was. Will anyone remember this groundless euphoria when the dust settles and the truth needs to be faced?

Surely no one seriously doubts that spending is finite? Surely no one out there thinks that if you drop the price of something you will sell more, ad infinitum? This is where economic theory comes unstuck. The industry and those who surround it need to learn from last year – netting out this period and Christmas, there will be higher costs, pretty much the same sales and lower margins.

This year there is the double whammy in materially higher costs. While far fewer customers turned up at stores, retailers still had to pay for the huge increase in staff they lined up to cope with the crowds that failed to show. They then faced higher costs online to deal with the surge in website volumes. And finally, there will be higher than budgeted costs from dealing with the higher returns – returns online dwarf those in stores.

In every type of business there are some sales you don’t want, and retail is no exception. Black Friday, Cyber Monday and the various other artificial devices out there are exactly that: margin diluting and brand damaging. We are now entering the key trading period of the year. UK retail has significantly damaged its chances of generating full price sales in this period because of Black Friday. Right now, the vast majority of the High Street is on sale, and will be all the way through.

** We track promotions, analyse supply & demand, and forecast. For details, contact

Promotional chaos missing point

Good morning retail!! Welcome to Cyber Monday. Or is it still Black Friday? How about Christmas? By the middle of last week 77% of High Street retail had launched Christmas. By the week’s end, some had moved it over to make room for Black Friday alongside, while others suspended Christmas for a few days. Find this all a little confusing? Imagine how customers feel.

All this is very symptomatic of the knee-jerk, lemming-like retail market that we find ourselves in. One where only the few can set their own competitive agenda. The rest feel compelled to follow the herd because they don’t have enough confidence in their brand, and what it stands for with customers, to deliver sales revenue.

So today, most retailers will be shouting three different messages to their customers, all with fantastic offers attached to these different events. The amount spent by consumers will not be higher – in fact in my opinion it will be lower. But worse still, spend will be at lower margins. Margin dilution comes a) from lower prices which will rarely be balanced by a high enough volume increase and b) the higher stock replenishment and labour costs of generating those sales. More subtle is the message it sends consumers. Apart from the sheer confusion of it all, it is the idea that most of customers will metaphorically and literally buy the proposition of an endless stream of wonderful bargains.

When Black Friday and Cyber Monday are over, how do retailers think their customers will react to a full price Christmas offer?

** Our detailed forecasts for Christmas sales, and for 2016, are available. Get in touch for access details at

Black Friday – not a non-event … yet

Last year was effectively our first experience of Black Friday and the vast majority of UK retail embraced it with enthusiasm. Once the dust had settled and the implications became clearer that enthusiasm gave way to pragmatism. Most are doing Black Friday but in a more managed, lower key way. We didn’t see the chaos or mayhem of last year but we also haven’t see the shops attract anything like the footfall expected. Online has taken a much bigger share that expected.

The results of this are not great. Websites still crashed at various times of the day. Stores were over stocked and over staffed. This year’s event will be every bit as economically damaging as last year’s. Higher cost of sales and lower margins from spend brought forward from December. And December sales will be hit – spending is finite.

A year of relentless price promotions, every month in every sector, has resulted in shopper and retailer fatigue. The constant diet of discount noise from shop windows and website landing pages is bound to take its toll, and clearly it has.

Our research shows that 26% of High Street retailers rejected Black Friday. Notably, some retailers simply ignored it – Next and Primark among them. Some ran other kinds of promotions like Asda, Harrods and White Stuff, and others actually promoted the fact that they were opting out – Fat Face and Jigsaw are excellent examples.

Next year I expect Black Friday to arrive again, but the number of retail opt outs will be higher still. Last year will have been its peak and the most barmy US retail import we have made will continue its gradual journey to being a none event.

** Our Promotional Tracker shows who does what, when and how. We also forecast retail sales for Christmas and beyond. For access details


Autumn Statement – no stimulus for retail

Today’s Autumn Statement and Spending Review has been good news for consumers. The axing of planned cuts to tax credits, the pensions increase and expanded apprenticeships will all help to boost household budgets to a degree, albeit modestly.

On the cost side of the equation, the topic of business rates – a key issue for the industry – remains unresolved. The Chancellor will unveil the results of his review in next March’s Budget. Meanwhile, the planned devolution to Local Authorities is discouraging. Their track record in understanding business in general, and shopping in particular is a worry. Meanwhile, no mention of any real change in structure and the methodology by which rates are set.

As well as a mild boost to consumers’ finances here, employment is up at record levels and real wage growth is kicking in. So far, the benefits have passed retail by and I am sure it will stay like that, for the next few years at least. An already oversupplied market is still adding capacity, and this is forcing permanent price deflation. My forecasts for 2016 show still more downward pressure on price, while increased disposable income will continued to be allocated beyond retail. The buyers market marches on – great news for shoppers but less so for retailers.

** We have detailed 2016 forecasts for capacity, demand and margins – get in touch for access details 


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