Fragile high street snapshot

A raft of retailers provided a snapshot of the current fragile retail economy in their trading updates last week and it wasn’t especially comforting.

Supermarket giant Tesco revealed a 0.5% fall in first-half like-for-like sales – excluding VAT and petrol – in the UK. Its rival Sainsbury’s posted a 1.9% rise in like-for-like sales, which excluded petrol but not VAT, for the first six months of the financial year.

Elsewhere on the high street, Thorntons‘ like-for-like sales dropped 7.8% in the 14 weeks to 1 October and homewares retailer Dunelm saw its like-for-like sales growth fall 2% over almost the same period. Mothercare too reported a like-for-like slump of 9.6% over 12 weeks with a notable drop in the past four weeks.

However, despite the gloomy sales figures, the retail sector has not been hit by any significant administrations following the September rent quarter day. With some respite on the insolvency front, preparations are now firmly under way for what is hoped to be a boost in sales activity for retailers in the run up to Christmas.

It is also worth flagging up the recent Indian summer experienced in the UK recently, which had mixed results on footfall. According to Springboard’s National High Street Index, which monitors over 85 UK towns and cities, footfall on the first Saturday of October, when the heatwave hit, dropped 7.1% year-on-year. Conversely, footfall surged on Sunday by 11.7%.

Diane Wehrle, research director at Springboard, said:The last week of September, which included the week of unusually hot weather, represented the only week in the month in which footfall increased from last year (+2.4%) – in all other weeks during September footfall fell from last year.  The result for the last week of the month is much more positive than the result for the same week in 2010, when footfall fell by -4.5%.

 

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