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Retail Sales Not As Bad As Expected

Retail sales fell only slightly in July from the previous month's blistering pace, official figures showed today. Sales dropped by 0.4% in July, the office for national statistics (ONS) reported, leaving them 4.4% higher than a year earlier. A drop was on the cards after surprisingly strong sales in June as hot weather brought up shoppers.

"It seems that people stayed at home in July and using the barbecues they had bought in June," Richard Batley, an economist at Halifax Bank, told Reuters.
The ONS cautioned that not too much should be read in the July numbers as the three-month growth rates were broadly comparable to those seen in the second half of last year. The drop in sales last month should provide some relief for the Bank of England, which has expressed concern at the build-up of consumer debt.

"Today's data may soothe the Bank of England's worries about the consumer spending being out of control and may make markets re-examine their current belief that the next interest rate movement is more likely to be up," said Andrij Halushka, an economist with the Centre for Economics and Business Research.

22 August 2003

Study predicts sluggish apparel sales growth

Continued sluggish retail sales growth in 2003 across much of Western Europe will exacerbate the already tough competitive environment for apparel retailers. Management firm Retail Forward reported this sceptical news in a recent study entitled, Apparel Retailing in Western Europe.
Despite the difficult environment, major European clothing retailers, and particularly multi-national specialty chains, are succeeding by taking market share through innovative, fast-changing product offers and lower cost, more efficient business models. "The ability of these specialty chains to implement faster and more flexible supply chains is giving them a real competitive advantage," said Ira Kalish, Director of Retail Forward's Global Intelligence Program.

Weakening demand, rapid consolidation and a greater internationalisation of styles are several factors are transforming apparel retailing in Western Europe like never before. These in combination with the faster and more flexible supply chains are the principal drivers of the retail apparel industry in Europe, and are key to the success of specialty apparel chains.
"Consolidation, internationalisation, and the speed of the fashion cycle will continue to drive change in the structure of European apparel retailing," Kalish stated.

According to Kalish, the most significant issue transforming the retail apparel industry in Europe is fast response. "Speed and integration of the supply chain will continue to shape the future of the retail apparel industry in Europe by enabling more flexible, demand-driven fulfilment," Kalish commented. "The hallmark of successful apparel retailers is an ability to create distinctive product ranges that are responsive to quickly changing consumer expectations," he continued. The ability of specialty chains to implement fast response is placing pressure on traditional retailers, including independents and department stores. Their explosive growth is shifting apparel market share and is changing the structure of apparel distribution across Europe, Retail Forward reported.

Recent tough market conditions have favored those retailers who can respond to consumer demand more quickly and at lower cost. A handful of specialty retailers such as Sweden's H&M and Spain's Zara, continue to defy the global economic downturn. "These companies are particularly adept at understanding what consumers buy - and want to buy - in real time and responding quickly to sales trends and customer feedback," Kalish added.

The explosive growth of these chains also is driven by diversification and international expansion. As a growth strategy, they are capitalizing on the heightened interest in their brands by extending them into new product areas, new customer segments, and new formats.

January 23, 2003

Clothing prices steer UK inflation rate up

The second greatest contribution to the unexpected rise of the UK inflation rate - following housing costs - came from clothing and footwear, particularly women's clothing prices. The UK inflation rate in September reached its highest level since April, according to figures from the Office of National Statistics (ONS).
The UK's main gauge of inflation, calculated as retail prices minus mortgage interest payments, rose 2.1 per cent from a year ago, but still falls below the Bank of England's ceiling of 2.5 per cent. Analysts believe though this could be short-lived, with price cuts likely to follow recent warnings of slowing winter clothing sales amid unseasonably warm weather.

October 18, 2002