Worst trading period in 10 years

April 12, 2011

Retailers will have noticed the dip in sales lately, as the Retail sales for March fell 1.9%, it was also announced earlier this week that a whopping £1.7bn has been stripped off the value of high street retailers.

Although the FTSE All-Share index has risen by 2.5pc since January 1, the general retail sector has actually seen a 6pc drop in its value from £27.5bn to £25.8bn, bare in mind this doesn’t include supermarkets.

One chief executive of a large retail chain stated that the past six to eight weeks have been the worst trading period for 10 years.

Not surprising really, if you’ve been following our blogs or are up to date with retail news, you will have noticed over the past month many retailers issuing profit warnings and coming under-fire from critics.

Since January this has been the case, HMV have released three profit warnings, one of which I blogged about, blaming the availability of easy-access media and the download revolution. Dixons, another high-end retailer has issued a profit warning. As well as Clinton Cards – again, with the rise of websites such as moonpig.com and funkypigeon.com it’s hardly surprising that the high-street retailer is struggling.

Their shares have reflected what has been a disastrous period for them, HMV’s shares have fallen by 56pc and Dixons’ shares have plummeted 45pc.

The high street is in serious need of a facelift, retailers just aren’t generating the customers required, and footfall figures reflect this compared with March 2010 this year saw a fall of 7pc. Whilst as a whole for the first quarter of 2011, the number of shoppers hitting the high street fell by almost 5pc.

The retail sector really is under enormous pressure to turn things around, at the rate sales are plummeting and footfall figures are falling, the high street in particular needs to bring back the buzz of shopping.

Stephen Robertson, the director-general of the BRC, explained the pressure building up on store chains, he said: “The retail sector is under more pressure than it has been for some time with poor sales and rising costs. Non-food retailers are feeling particularly put upon and some of them are facing administration.”

It’s now crunch time for retailers, for most it could be a make or break year. Currently, they aren’t reaching their potential; perhaps it’s time for a change of strategy. Assess the new market, then adapt and change their business models…….Or be faced with administration.

In other news…

It’s a bon bon bonanza!

Customers with a sweet tooth have been opting for a taste of nostalgia recently, with sales of bon bons, dip dabs and milk bottles rising.

Sales of dip dabs shot up from the £1m they reached in 2009 to £1.7m in 2010. Dolly mixtures went up from £1.2m to £1.5m, whilst bon bons almost doubled in sales to reach the million pound mark for the first time.

The introduction of retro sweet shops across the country is an obvious factor, I know of one that’s opened up near me and it’s been an instant success.

Other retailers can learn something here, customers need to feel the buzz of shopping again, and injecting some nostalgia is a great way to do that!