The reports I’ve read so far have done little to inspire festive cheer, but then the retail market is nothing if not unpredictable, so let’s not get downbeat just yet.
Last year’s dubious promise of the worst festive trading for 25 years was averted with an 11th-hour surge in trade. With many ‘January’ Sales starting before Christmas, it’s hardly surprising that savvy shoppers wait until the last minute to get more for their money. It’s a brave retailer that can hold their nerve until the New Year before hoisting the Sale sign.
Of course, it’s too early to tell how trade will shape up this year, even if some retailers are trying to encourage shoppers to buy their presents early. Still, this hasn’t prevented some industry watchers from taking a pessimistic view with 66 days to go. The late legend of the City, Seymour Pierce retail analyst Richard Ratner, quipped before his untimely death last week that his prediction of the worst Christmas in a quarter of century was quite right, he just made it a year early.
Certainly, market conditions are less conducive to a successful season than they may have been last year. Further interest rate rises, the Northern Rock shock and the credit crunch will all serve to dampen shoppers’ enthusiasm for spending. And if that wasn’t bad enough, I’ve read that some local councils are even ditching the traditional Christmas lights this year.
Not for reasons of energy saving (though it wouldn’t be surprising if someone did play that card) or their gloomy predictions of trade, but because insurers are hiking the premiums because of the safety risks of putting them up and changing the bulbs. Makes you wonder why we don’t just cancel Christmas altogether.
That said, retail trade overall has thus far remained steady. According to the British Retail Consortium, like-for-like sales were up 3% in September. But the performance of retail shares on the stock market – which, according to the Financial Times, are underperforming against the broader market by about 16% – suggests that investors don’t expect this stoic trading to last. The lack of merger activity is another sign that the City is steering clear for now.
However, like British shoppers and the great British weather, the City is a fickle thing and it can fall back in love with a sector just as quickly as it drops one, so we mustn’t become too despondent. Strap yourselves in and proceed with caution, but remember that the doom-mongers have been proved wrong before, even though it was at the last possible moment.
If you want to quiz some of the sector’s top names, such as Marks & Spencer’s Stuart Rose, Asos.com’s Nick Robertson, and Queen of Shops Mary Portas, on how they think Christmas and the sector in general is shaping up, make sure you attend the Drapers Fashion Summit on November 20-21. Visit www.emapconferencesites.co.uk/drapers to book your place.