Now the Christmas reporting season has pretty much run its course, a number of general points seem to have surfaced. As with every other Christmas, there are always winners and losers and the curious mix of tactical success and structural change.
So from all the data and results and the commentaries, what did I feel emerged?
First, if you has things that consumers wanted then you were quids in. OK, it has always been thus, but this year the redefinition of value through the recessionary lens saw winners at both the top and the bottom end of the market. Luxury did well, but so did the discounters, But then so also did those in the mainstream that caught consumers’ eyes, whether Waitrose, M&S and Sainsbury in food or others in fashion. Some really good figures were seen.
Secondly, and in a parallel universe, if you had nothing that consumers cared about, then they walked away. So in the middle market despite the discounts and the loss-leaders, retailers struggled – Argos being amongst the obvious in this group. Price matters, but only if the product is wanted (fashion) or needed (food). Much of middle Britain’s retailing went into reverse, or in some cases (d2, Blacks, Past Times, Peacocks) simply failed. Some of the bad were truly dreadful.
Thirdly, overlaying this, and for me the most interesting thing, is that it seems to have been an online Christmas (whether computer or mobile). Even retailers trading badly (and Tesco is the poster child here but see Dixons) saw online do well, reinforcing the sense of a structural change in the market. The internet, in all its guises, is now mandatory. At the micro-level, with all the e-readers sold, problems seem likely to accelerate for Waterstones, HMV and the like. There’s being on the internet and there’s being killed by the internet, and the future is tough for those who are on the wrong side of the line.
So where does this leave us – and Scotland? It would be good to know the proportion of online sales across Scotland and in comparison with elsewhere. Middle Britain retail is not going to be around to lead the resurrection of retail in Scotland, killed by the internet and other cost pressures. Space plans will be reigned in and we may have seen a tipping point in thinking about retail space (at all sorts of levels) Maybe, just maybe, this gives local some chance?
Pre-Christmas the Guardian ran a lead story about the huge expansion plans for the major supermarket chains. At the time I commented that this was overblown and probably counter-productive for the retailers, if true. What price Tesco’s expansion of space now? Yes retailers all want good, new space and stores, but the emphasis for all retailers is now more on the good(think CVA, closures etc). And if retailers can’t get good, then they’ll take the internet.
These dichotomies – good space and the internet and the polarised performance of the retail market (don’t be stuck in the middle) – are the new reality for Scottish and British retailing.
But maybe there’s another reality to come. We’ve had the sales figures, but I wonder about the achieved margin for some retailers, given the discounting to entice consumers in and to buy. There’s more pain to be revealed I am sure, and the problems won’t all go away by cutting costs and lessening consumer satisfaction.
A Bumpy New Year to all.