Stores say consumers are now immune to gloomy economic news but weather is a washout for spring sales.
Fresh product and tight merchandising will be key to maintaining consumer confidence and spend through the UK’s double-dip recession, industry figures have said.
Retailers dismissed concern that the UK economy shrinking by 0.2% in the first quarter of this year would further dent consumer confidence, saying they were more concerned with the difficult trading conditions brought on by the recent wet weather.
David Pidgeon, managing director of value womenswear chain Select, said: “Is consumer confidence going to be dented as a result of news of a double-dip recession? I don’t know. I don’t think it will make much difference. All I know is that current trade has been harder than we’ve experienced for some time. Like-for-likes earlier in the year were good but in the last three weeks it has switched off. It’s more to do with the weather than anything else.”
Andy Rogers, brand director at Reiss, added: “Things like the weather, transport problems and bank holidays are all reasons that people don’t spend money and are much more likely to stop people shopping than being told we have re-entered recession.”
However, Anthony Thompson, chief executive of lifestyle retailer Fat Face, said news of a double-dip recession would prolong already flat consumer sentiment. As a result of the recent bad weather, Thompson expects more discounting and more companies to fail. Fat Face, though, will not discount.
Thompson said: “There is a lot riding on having a decent summer and a decent cold winter. If we don’t get seasonal weather patterns I’m certain that more companies will go into administration. Margin for error in the retail sector is the smallest I’ve ever seen it. They cannot afford to make the wrong decision.”
A tight rein over merchandising and a focus on new product will be key to steering businesses through this tough time, industry insiders said this week.
Pidgeon said that if tough trading continued, Select would be forced to look at cancelling orders but would not consider widespread discounting.
He said: “We’ve not yet cancelled orders but we will be looking at it as we start to see how the summer pans out. It’s more about tightening things right now. There’s some stock that we can play around with through fabric, or moving things around – this is down to us owning our own factories.”
Suzi Spink, chief operating officer at womenswear retailer East, said: “People do have to discount if consumers aren’t spending and they have to shift stock. However, it is about having a balance and maintaining the integrity of the brand.”
Keith Ewing, owner of Scottish lifestyle indie Number Eight in Stirling, Scotland, said consumers were so used to recession news they had “switched off”. He added: “You’ll still get customers through the door with new brands, constant remerchandising and new displays.”
Consumer confidence was the top business concern for this year for 267 of the 329 retailers surveyed in the Drapers Market Report last month.
High street saturation: wet weather has dampened footfall and halted the demand for spring 12 product