Three of the UK’s best-known high street retailers have suffered a sharp drop in sales, fuelling concerns for the immediate prospects of the retail sector.
According to figures recently published for the last quarter, Laura Ashley saw a 4.2% drop in UK like-for-like sales, Dixons reported a 7% fall, while Mothercare’s sales contracted by 2.4%. Share prices also took a battering: Laura Ashley’s share price was down by 15%, Mothercare’s tumbled by 9.5% and Dixons plunged 20% before rallying.
The high street stalwarts acknowledge brittle consumer confidence, with Laura Ashley highlighting ‘a general weakening in the consumer economy’ and Dixons recognising that ‘consumer confidence is fragile’.
Mothercare has been recalibrating its commercial property portfolio, closing twenty-six high street stores over the past year while opening twelve larger parenting centres.
Last year Laura Ashley streamlined its collection of commercial property, closing twelve stores and opening two new ones.
Dixons is reported to be evaluating its business in Spain, where it has thirty-four commercial property operations. Within the UK, it is focusing on its more profitable commercial property, revamping more than fifty stores. Commercial property in the Nordics and Italy is also believed to be earmarked for development.
Higher fuel and food prices together with the VAT rise are believed to be taking their toll, with a survey finding confidence among UK consumers to have ‘stagnated at depths seldom seen outside of an actual recession’.
The report was produced by GfK Social Research, whose MD Nick Moon advised that next month’s figures would be highly significant, coming after the recent budget: ‘Next month’s figures will reveal whether the budget really did put fuel in the tank of the economy – or merely poured more cold water on people’s personal finances.’
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