Retail Sales 2010

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Retail Sales 2010

  1. 1. FSP Christmas Sales Report - 2010
  2. 2. • Christmas 2010 trading summary • 2010 in perspective • Key issues in 2011 • 2011 expectations2 Contents
  3. 3. • It affected business but did it reduce sales? • Next says it lost £22m of sales, HMV £20m, M&S £55m and Debenhams £30m • However: – Brent X closed Saturday before Christmas but then had 2 record days – Peter Cowgill, CE of JD Sport, claims ‘lost’ sales were exaggerated – BRC said reluctance to spend was a result of economic and job uncertainty • There is a general ‘consensus’ (amongst retailers) that non-food lost c2% of sales due to the snow3 The Weather!
  4. 4. Christmas Trading Results: UK Retail Extracts
  5. 5. 2009 2010 • Winners were Restaurants department stores Dept/Variety Stores • Leisure and household Clothing & Footwear most challenging Personal Grocery Leisure Household -4 0 4 8 12 %5 Like-for-like Sales Averages by Category
  6. 6. • 2009 better for most than 2008 • 2010 modest performance • Note Burberry at +14%, Aurum Group +15% and White Company +24% (total sales)6 Positive Like for Like Sales - Comparison
  7. 7. • Direction of travel worrying for Comet/Thorntons • Surprisingly weak performance by New Look7 Negative Like for Like Sales - Comparison
  8. 8. • no like-for-likes quoted, but total sales increases of >90% group • Non-Food - surprisingly good results, compared to its own Food section • something has gone right at last! • there’s still a market for luxury • 20% up over Christmas8 Some Interesting Winners
  9. 9. • Christmas revealed little that was not known: – Bad weather can affects retailing (or not!) – One-stop shopping locations benefit - covered malls, department stores and supermarkets • But sales growth is slowing – the difference between the best and the rest is increasing • Retailers direction of travel is important – not just sales extracts • Like for like figures are interesting but should be treated with caution • Sales are vanity, profit is sanity9 Christmas Sales - Summary
  10. 10. 2010 Trading – a Glance Back
  11. 11. 90 8000 Total Number of Stores 80 7000 Count of Retailers 70 6000 60 5000 50 4000 40 3000 30 20 2000 10 1000 0 0 2008 2009 2010 Retailer Failures Store Closures • The shake-out has slowed • Many casualties already had a chequered history e.g. Adams, Faith • 2010 was the Year of the Phoenix - Cruise, Thoughts Cards, Happit • British Bookshops and Krisp latest casualties11 Retailer Failures
  12. 12. Put in context of 2010 trading overall: 60% 50% 40% % Retailers 30% 20% 10% 0% Healthy Head above water Very worrying 2009 2010 • There has been a marked increase in the proportion of Healthy and retailers and a decline in Very Worrying • FSP tracked 62 new retailers opening in 201012 Business Health
  13. 13. %6 5 4 3 2 1 0 Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- 09 09 10 10 10 10 10 10 10 10 10 10 10 10 3mth Like-for-Like 3mth Total • But the sales trend remains unmistakably down • It is therefore critical to understand the ‘direction of travel’ for individual retailers13 UK Retail Sales Growth (BRC Data)
  14. 14. • Direction of travel is not consistent • Identifying winners and losers is essential -60% -40% -20% 0% 20% 40% % Change in BIS Index (2008 - 2010)14 Change in Financial Health
  15. 15. 2011 - Key issues
  16. 16. UK External VAT Increase Rising Commodity Prices Public Sector Cuts Sovereign Debt Crisis Rising Inflation / Interest Rates Falling Exchange Rate Falling House Prices Pay Restraint Fragile Consumer Confidence Restricted Consumer Access to Credit Stalled Retail Development Pipeline16 Key Factors
  17. 17. 40% 70% Internet / Supermarket Share 35% 65% Town Centre Share 30% 60% 25% 55% 20% 50% 15% 45% 10% 40% 5% 35% 0% 30% 2005 2010 2020 Internet Supermarkets Town Centres Source: FSP• Growth in Internet and Supermarket turnover significantly higher than on high streets between 2005 and 2010• If trends continue, by 2020 the majority of comparison goods sales will take place outside town centres17 The Elephant in the Room…..
  18. 18. 2011 - What sort of a year?
  19. 19. • Middle ground will continue to be squeezed • Weakest/smallest of the value operators will come under pressure • Electronics – some ‘rationalisation’ would not be surprising • Household goods – continued depression of house market • Tired retail formats e.g. Moss Bros, HMV, Bhs? • Middle sized towns will continue to lose out to larger towns, OOT and on-line, leading to continued consolidation of portfolios • Public sector dominated economies will be hit • Margin pressure will continue to squeeze sustainable rents19 2011 – Where Will It Hurt?
  20. 20. • Retailers with strong brands, distinct market positions and attractive formats will keep ahead of the pack e.g. H&M, Hollister, Apple • Tough times will continue to spawn innovation – more websites • New market entrants e.g. Gillyhicks, Forever 21, 7 For All Mankind • Growth of home-grown newcomers e.g. Boux Avenue, Hed Kandi • Quality, value and customer experience will out perform the market e.g. regional malls, factory outlet centres, John Lewis • Successful trading locations will be those which embrace and exploit the needs of the consumer • Successful landlords will be those who understand their occupiers and adapt to the evolving needs of their shoppers20 FSP Predictions
  21. 21. FSP  19 Manor Courtyard  Hughenden Avenue High Wycombe  HP13 5RE  UK T +44 (0) 1494 474740 F +44 (0) 1494 474262 E fspretail@fspretail.co.uk W www.fspretail.co.uk & www.snap-shop.co.ukFripp Sandeman and Partners Limited, trading as FSPG Nicholson (Managing Director) J H Fell J Hewson K GunnRegistered Number 1284879Registered Office 19 Manor Courtyard Hughenden Avenue HighWycombe Buckinghamshire HP13 5RE ©FSP 2011

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