Christmas: far too early to callPosted: November 13, 2011
Not a great deal of action on the Front of Store blog in the past couple of weeks, as I’ve been out on the road a lot, assessing stores, formats and catchments. Plenty of news in the retail sector, though, with the end of the Best Buy brand in the UK, and the sale of Comet for £2 (with a £50m dowry); as the Observer comments on the electricals sector this morning:
Amazon’s small overheads and Tesco’s huge scale have enabled cheaper products to eat away at the specialists’ profits. So far they have resisted the fate of the book and record stores swept off the high street by online rivals. Could the worsening economy now push yet another retail category into the virtual universe?
It has been a difficult autumn across most retail categories, with the continued mild weather slowing down sales of winter fashion and precipitating a series of one-day events at the likes of House of Fraser and Debenhams. Recent results at Next and Marks & Spencer both illustrated how challenging the middle market is, even for the best-run businesses, and WH Smith unveiled lower sales and higher profits for the nth successive quarter – Nils Pratley has commented astutely on this. (Nationally, book sales are poor, running 12% down on 2010 last week.)
There are just 41 shopping days left until Christmas, and though the streets of Staines were busy yesterday afternoon, there’s still a lot more window shopping than actual commerce taking place. Consumers are well-versed on tough Christmases now, and the question is not “will prices fall?” so much as “how early will the sales start?”. There’s already plenty of red-and-white in the windows, as hard-pressed retailers seek to liquidate stock and free up cash.
London’s West End tourist boom continues, with Crown Estates announcing that there will be fewer, larger stores in Regent Street in the future; Westfield Stratford has welcomed millions of customers (I’ll be back there on Tuesday) and has indicated that the old Whitgift Centre in Croydon could be next for the Westfield treatment. But London has never been as disassociated from the rest of the country, in retail terms, as it is now.
It’s going to be a difficult Christmas, with every sale a small victory against consumers’ tight purses and low levels of “feel-good” (despite that “Capracorn” John Lewis ad). Online will grow, device sales will soar (Best Buy may be dead, but Wireless World is Carphone’s focus now) and new retail formats will emerge on the shoulders of the old.
On a lighter note, here are a couple of stores positioning themselves for the future of the book trade: