Member Article

Heavy snow results in unexpected retail sales fall

Retail buying figures fell unexpectedly in January, putting a halt to the year-on-year growth seen in the retail sector since August 2011.

According to ONS research, estimates showed an overall fall in the quantity bought in small stores, in particular those with under 9 employees.

Small food stores reported that heavy snow in the latter half of January had disrupted sales, while larger stores experienced increases.

In the food sector, the proportion of sales made online rose by just over 27%, equating to 3.7% of all food sales, the highest on record.

Peter Saville, partner at advisory and restructuring firm Zolfo Cooper, commented: “The retail uncertainty continues. It may have been a turbulent start to the year with household names such as Jessops, HMV and Blockbuster and now Republic entering administration but there is still hope for companies who take matters into their own hands and think about how to best serve the needs of their customers.

‘E-tail’ may be one of the most popular buzzwords of the New Year but retailers shouldn’t necessarily rush to close stores. Store closures can have a massive impact on customers – especially those who prefer to shop in-store – and companies need to protect these revenues, rather than simply hand them to a competitor.“

Paul Feechan, office senior partner at Deloitte in the North East said: “Today’s figures bring into sharp focus the unsettled picture for North East retailers. Despite a decent Christmas and tight stock management ensuring effective seasonal discounting, today’s figures are another blow for the high street. However, online and mobile channels have continued to see significant year-on-year growth.

“Perhaps more than ever before, January’s results demonstrate the importance of a sophisticated multi-channel strategy. Those with effective digital and mobile services have reaped the rewards, whilst those still coming to terms with the online revolution have struggled. This polarisation between retailers’ performances will be a key characteristic for the sector throughout 2013.”

Adam Stewart, marketing director of Rakuten’s Play.com, reaffirmed the call for multi-channel strategies and highlighted the European Commission’s Digital Agenda report, that suggests only 14% of small retailers were selling online last year.

He said: “Independent retailers need to find a fresh way to compete and online marketplaces provide a great platform for smaller retailers to sell on a level playing field while allowing them to remain independent at the same time.”

This was posted in Bdaily's Members' News section by Tom Keighley .