You know how it is … you go away for a few weeks and when you come back everything is sort of the same, but well also, sort of different.
The British (maybe only Scottish) summer is of course a thing of wonder … long sunny days, barbecues, strawberries and cream, back to school sales in June, Christmas cards in July …. But it is meant to be a time to kick back and enjoy, to contemplate the world and to enjoy the moment.
But you go away and retailing seems to have had a collective shudder and moved (even faster) into reverse. Habitat disappears (well sort of), just like that. Retail sales decline by the largest rate in 20 years. Focus, TJ Hughes … gone, and possibly forgotten. Thorntons puts itself on a diet. Allworths and Haldane’s, both born of other wreckages, have their own car crashes. The BRC reports confidence in sharp decline – again. Retail inflation remains higher than many can remember. The Opposition (Labour in case we forget) call for an emergency cut in VAT … and in response furniture retailers are told by the Government it might go up to 25%. Asda’s disposable income tracker plunges; electrical sales slump, even in mighty Tesco. Argos hits some choppy water. And so it goes on … and on … and on …
Are there ANY success stories out there? Well yes and we must not forget that, but they are currently drowned out by the tales of woe, halted expansions, retrenchment and CVAs, shop closures and loss of jobs and confidence. Scary times all round. And it is not likely to get any clearer quickly as more job cuts and reduced government spending have yet to really kick in. And interest rates have only one way to go, whatever we think about demand vs inflation.
These are uncharted waters for many consumers, retailers and recent times. There is little experience on which to base decisions. There is a perfect storm of finance, property, spending cuts, structural change and realignment underway. It is too easy to say retailing will never be the same again, but maybe in some ways and some places, this is the truth of it:
- The internet is here to stay and has been joined by various technological cousins – these are changing what we think of, and action, as retailing
- Middle ranked and middle market retailers in particular (the retail version of the squeezed middle perhaps) have hard decisions to make and are tending to pull back from retail space in many towns and other locations
- Cost structures are being realigned for consumers and retailers alike; we do not know where this will end up, but it is likely to focus further attention on prices, costs and services, localisation and internet
- This as a consequence gives an opportunity to rethink our town centres and other spaces. But it will require realism not nostalgia and an opening up of space for local and entrepreneurial activities
So, let’s hope we can enjoy the summer, but for many consumers and retailers it is going to be far from comfortable, whatever the weather.