Based on today’s Christmas retail results, David Fox, Colliers International’s Head of Retail Agency – North, and Paul Souber, Head of Central London Retail Agency have commented:
Paul Souber says:
“The retail market was dreaming of a strong Christmas, and that’s exactly what it got. Today’s (12 January 2017) results have shown that consumer confidence remained strong, and the ‘scrooge effect’ of Brexit, interest rates and inflation were negligible.
“The lead up to Christmas was one of the strongest seen in the last few years. The food sector in particular reaped the rewards; boosted by clever Christmas advertising and well timed offers. The fact that Christmas day fell on a Sunday also meant that consumers had a full week beforehand to make their last minute purchases and bag a deal. Marks and Spencer’s improved food results (up by 0.6 per cent) are a good demonstration of this.”
Souber concluded: “Let’s hope that the consumer confidence lasts well in to the new year and isn’t dampened by Article 50 or seasonal fluctuations.”
David Fox comments:
“Across the board, the 2016 Christmas trading figures were much better than anticipated. The fact that we saw strong – and in many instances double-digit - percentage sales growth from a host of retailers across the sectors is frankly amazing given the geopolitical turbulence of last year. Joules (up 22.8% year-on-year), Ted Baker (+17.9%) and Boux Avenue (+16.6%) all had exceptional festive seasons and many more brands put in solid performances.
“And whereas in 2016, some retailers saw sales fall in-store but increase online, the latest figures generally show a much more closely coupled relationship between the two channels. It has taken some time for UK retailers to get the blend between their online and in-store offers right, but I think that these trading figures are a clear indicator that they have now made substantial progress with this.
“There is now far more coherence in the online/in-store relationship and, as a consequence, we are seeing retailers take a more forensic approach to their store networks. This isn’t just about closing stores and cutting costs; it’s a matter of ‘right-sizing’ and understanding what the shopper wants.
“The knee-jerk reaction of dramatic price-cutting and continuous sales is giving way to a more considered approach. Black Friday was far more muted last year and the January sales are no longer as important as they once were. This is because retailers are looking at the trading year as a whole and adapting to conditions in a much more flexible way.
“In this context, the comments from Jigsaw when announcing their Christmas trading figures were particularly pertinent. They now see their store network as a ‘virtual warehouse’ for an omni-channel offer which enables shoppers to access products in the way in which they want. Accordingly, the brand feels that the year-on-year performances of individual stores have almost become an irrelevance. In the new retail landscape it is the net result of the whole offer that counts.
“Accordingly, the 2016 figures are telling us more about which brands are flourishing rather than – as they did last year - the emergent relationship between online and in-store retailing. These figures are a tremendous boost for UK retailing as we head into 2017.”