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BDO High Street Sales Tracker shows a fall in July

Retail suffered a quiet month in July as shoppers avoided the high street with poor weather further dampening spirits seeing retail sales fall their furthest since October 2011.

Like-for-like sales fell 2.9 per cent year-on-year at mid-tier retailers, according to accountancy firm BDO’s High Street Sales Tracker, despite better weather at the end of the month.

As the cost of living continues to rise while wage inflation remains low, consumers are cautious over unnecessary spending, with fashion seeing a 2.6 per cent year-on-year drop over the month as retailers struggle to select seasonal lines due to changeable weather.

Don Williams, National Head of Retail and Wholesale at BDO LLP, explained: “With consumers increasingly value-conscious it is still a challenging climate for retailers, and the rain in early July did not help.”

Homewares saw the biggest plummet in sales as shoppers avoided purchasing big ticket items, seeing a drop of 13 per cent on the same period last year.

Although bad weather shook the fragile high street, online sales rose 24.9 per cent over the period as retailers continue to invest in multichannel, a critical move in order to keep up with changing consumer demands, Williams believes.

However, Olympics fever had been expected to give the retail sector a much-needed boost and Williams feels that a dedication to supply chain improvement is the key to success during unseasonal weather and busy periods.

“It is dangerous to just blame the weather,” Williams warned.

“There are retailers, particularly in the discounting space, who are bucking this trend through flexible and responsive supply chains. The quicker you can get your products to market, the louder you will hear tills ring.

“Many fashion stores were caught out when, after weeks of rain, Britain basked in temperatures of 30 degrees. Getting your supply chain right is the new retail battleground and those who achieve flexibility and agility will survive and prosper.”

Of course, high street retailers and those based in shopping centres have been preparing for the current influx of visitors in different ways for months, and supply chain specialist DHL’s Transport Strategy & Policy Director Hugh Basham recently told Retail Gazette of the need for an all-encompassing strategy.

“Wherever they are based, retailers need to prepare for busy periods by assessing how they can mitigate the challenges but make the most of the opportunities,” he said.

It had been expected that East London shopping centre Westfield Stratford, perfectly situated within the surrounds of the Olympic Park, would see a massive jump in sales and footfall as shoppers flocked to the centre, though over the weekend the centre closed its doors to non-Olympic ticket holders.

While this will likely impact monthly figures following the event, its sister centre Westfield London reported an increase in traffic as the Games got underway.

“The Games provides extraordinary exposure for Westfield’s retailers on the global stage and our two London centres together will attract over 60 million customers in 2012 and will deliver sales of around £2 billion,” a spokesman said.

“Our two flagship centres in London have provided a wonderful platform for the expansion of Westfield into new markets in the UK and internationally. We are pleased that the staging of the Games in London is giving Westfield even greater exposure.”

Source : Gemma Taylor - Retail Gazette

06 August 2012
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