Even in some of the more beleaguered sectors, notably electricals, the January Sales were better than anyone could have hoped and showed that shoppers will still spend if the price is right. For those still in a job, the benefit of lower mortgage payments and fuel bills is starting to come through.
Light at the end of the tunnel then? Maybe if you squint but the chances are it’s probably still the oncoming train. While the Sales might have released some pent-up demand in January, massive discounts were required and the sales momentum wasn’t sustained through the month. Looking more closely at the figures, food inflation has crept back in after all the Christmas price cuts, which also swells the figures.
There are no positive signs in the general economic outlook and with unemployment at its highest for 12 years, the increasing number of economically inactive people will inevitably start to filter through to consumer spending. The weather so far this week means February is a write-off and January’s gains will quickly disappear, while the weakness of sterling is becoming an ever more critical issue for many retailers.
That’s not to say there won’t be opportunities for good retailers in 2009, because there will, and the market share of weaker players is there for the taking. But even if you’re a glass-half-full type of person, the outlook remains very tough.
Who needs an ombudsman?
Retailers get a lot of stick for being tough on suppliers, but the reality is clear to see in Belgium, where grocer Delhaize has delisted 300 Unilever products after alleging that the FMCG giant insisted the supermarket stock all its products, regardless of customer demand.
Most suppliers are big organisations that can look after themselves and are more than willing to flex their muscles in talks with retailers. Maybe it’s the retailers that need an ombudsman to protect them, not the suppliers.
tim.danaher@retail-week.com
Read Tim’s blog, Retail Day
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