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A spring in the step of indies as multiples falter

New-season promotions and faltering consumer confidence have created a challenging environment for some multiples over the last few weeks, but specialist retailers reported a more positive start to spring trading.

“It’s very tough at the moment – as we suspected. With all the noise that prices were going to go up before Christmas, now the public is being very careful,” the chairman of a multiple retailer, who did not wish to be named, told Drapers. “For the first few months of the year it has been difficult to sell at full price and suddenly there are a lot of promotions around.”

The chief executive of one womenswear multiple concurred: “February was very tough. With inflation, grocery prices are going up and [the shopper] only has a certain amount of money to spend.”

Peter Ruis, chief executive of premium chain Jigsaw, reported “aggressive discounting” on the high street last week and warned there may be some distortion in trading numbers as a result.

However, Jigsaw has retained its typical firm stance and refused to discount, and Ruis said trading was “reasonable”: “I’m not sure we have seen real spring momentum yet but it is considerably warmer than last year, so I remain optimistic.”

Fashion sales at John Lewis grew by 7.7% for the week to 4 March compared with the same week last year, although it admitted that it price matched a competitor’s promotion, which boosted its figures. 

The British Retail Consortium (BRC) and KPMG Retail Sales Monitor showed non-food retail sales in the UK declined by 0.4% on a like-for-like basis during the three months to February – the first three-month decline since November 2011.

Paul Martin, UK head of retail at KPMG, said it was “clear that consumer confidence is showing signs of deteriorating”, while BRC chief executive Helen Dickinson predicted tougher times ahead.

“The impact of inflation on consumer spending will add further intensity to an already fiercely competitive environment in which the ability to adapt and innovate will be key to survival,” she said.

The retailer chairman added that the difficult trading environment is particularly pressing in mid-market womenswear, where consumers are shifting spend away from fashion into experiences, and which is most susceptible to the promotional environment: “It’s all very well saying come off the discounting drug but the reality is that the public will just go next door. The consumer doesn’t see why they should pay full price any more.”

The managing director of one footwear multiple told Drapers: “Trading has been OK. We’ve seen a bit of a shift in recent weeks as the kids were off on half-term and the weather wasn’t too bad.

“There’s not too much discounting apart from the tail end of the winter Sales, which is nice, but we’ve no real early indications on summer product as yet.”

Conversely, some independents told Drapers new-season sales have been strong. Steve Cochrane, owner of premium department store Psyche in Middlesbrough, explained: “We’ve had a great start to the year so far – I can’t believe how fast it’s gone.

“Normally the first two months drag, but sales have been strong across the board and I’ve heard similar reports from others.” 

Joanna Davies, owner of premium womenswear independent Black White Denim in Wilmslow, Cheshire, echoed this: “Spring has definitely sprung. Sales in February this year were more than double that of last year and March is off to an incredible start.”

She added: “The shoppers’ mood has lifted and people are still considerate about how they are spending but they are buying a lot earlier in the season than they were.”

 

 

 

Readers' comments (2)

  • Don't be fooled by the odd, experienced self promoter things for all indies are really tough and the rates fiasco has come at the worst possible time .

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  • Indies should not use business rates as an excuse. If you want a (so called) primary location you have to pay a premium. Moving to a secondary or even tertiary location where you may not have to pay any rates at all could be the answer in the longer term.

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