The retail recovery is already losing momentum, helped by falling prices in grocery and record high temperatures hitting sales in clothing. Everyone’s results are going to reflect a dampening down of demand.
Against this backdrop it is important that a retailer’s performance is not compared against its own recent numbers – it will invariably look poor. This market is one in which it is all about relative performance versus peers. When the going gets tough the key is to strengthen your competitive position, and gaining market share should be seen as an investment in future performance.
This year has seen the strongest growth we have seen since 2008. The business to have enjoyed the lion’s share of this growth have been the retailers who have strengthened their competitive positions over previous years. As growth begins to slow now, the businesses able to invest in growing share will be the winners when demand improves. So this is a period where relative sales performance will be the key indicator.