After a washout summer in terms of sales, retailers are hoping that winter will bring them better fortunes. Due to the wet weather which dominated most of the season, items such as summer clothing, barbecues and outdoor furniture failed to meet expectations even when the current unstable economic situation was taken into account.
Fortunately, the winter season has begun on a high, with sales on the high street seeing their largest level of growth since last Christmas. The 1.5 per cent increase on a like for like basis has largely been put down to shoppers stocking up on warm clothing for the coming months.
September’s sales compared favourably to the dismal performance of the high street in August, where like for like sales shrank by 0.4 per cent. These figures were released by the British Retail Consortium (BRC) in order to boost the spirits of retailers struggling to remain afloat during the recession.
August’s poor sales have been put down to the effect of the Olympic and Paralympic Games, as shoppers chose to remain indoors and watch the action rather than hitting the high street to grab a bargain. The poor weather also played a large role, with heavy rain dampening consumers’ enthusiasm for shopping.
Although sales figures for items such as home furnishings and accessories remained at rock bottom, falling at their fastest rate for three years, other categories of products picked up considerably throughout September. The pleasant weather at the end of the month saw barbecue foods and bagged salads increase sharply as families made the best of the sunshine, while convenience foods also increased – perhaps due to the back to school rush.
Consumers have also been influenced by television, in particular the hit show “The Great British Bake Off.” According to the BRC, baking items and ingredients have become increasingly popular as the nation becomes more and more engrossed in the show.
Director General of the BRC, Stephen Robertson, says; “After a poor summer for sales, this is a return to growth we have come to regard as relatively acceptable in these relentlessly tough times.
“The improvement has come from the weather and a change in the mind set of some customers.”
Of course, while Britain cannot be said to be out of the woods completely in terms of the recession, these latest figures are a definite sign that the economic situation is improving.
Disposable income for the average consumer is now beginning to increase in earnest, as the rate of inflation continues to improve. In fact, inflation has fallen from 5.2 per cent to 2.5 per cent in just under a year, therefore allowing consumers to return to the high street and boost the revenues of struggling retailers.
IHS Global Insight’s chief UK and European economist, Howard Archer, claims that the only way Britain’s economic prospects will improve is if consumers begin to spend in earnest again.
He says; “Given that consumer spending accounts for some 63 per cent of GDP (Gross Domestic Product) on the expenditure side, the role of the consumer is vital to growth prospects.”
Hopefully, then, this recent boost for retailers will continue throughout the winter season and into 2013, allowing retailers to post more positive third quarter results than many will have seen in a while. Should the rate of inflation continue to drop, thus allowing consumers to spend more freely than they have been able to since 2008, it seems that the end may well be in sight for Britain’s economic troubles.
Do you think the figures released this week are a sign that the economic situation in this country is steadily improving? What do you think retailers could do to encourage consumers back into their stores now that disposable income is finally on the up again?
