Look on the bright side
IF, like me, you feel like it’s been raining forever, then, take heart, for every rainy day inches us closer to summer.
Consumer spirits are pretty low – witness all the special offers. I’m bombarded with e-mails announcing at least 20 per cent off from top high street retailers on a daily basis. But, who can blame them?
Takings are down, because who wants to go trudging through the miserable rain for a new summer wardrobe – unless you have an imminent flight booked to a sunny place. So, we’re waiting for the weather to improve – which is turning into a battle of nerves for retailers.
We’re hoping for a moment in the sun as a summer of big events nears, kicked off by the Diamond Jubilee. Traditionally, we have a nice early summer, and then it starts to rain. Getting the nice weather early kick-starts the idea in a female brain about new summer clothes, so the bad weather is working quite nicely for the online retailers, but not so well for high street stores.
ASOS, for example, continues to outshine just about everyone. It is reporting 63 per cent growth. International sales now account for 62 per cent of its total sales and it still has massive potential for overseas expansion. The only thing that can really slow it down is increased shipping charges.
Argos has been having a tough time (relatively speaking) recently. Its pre-tax profits fell by £175 million in the year to February 25. Argos sells one in five of alltvs in the UK and said that a weak consumer electronics market accounted for 80 per cent of its total sales decline.
Analysts have been predicting lots of store closures as Argos struggles to compete with online retailers – notably Amazon- who don’t have the store rental charges and staffing/store delivery charges that Argos has to maintain.
Argos maintains that only seven of its 750 stores are loss-making, and that “enmasse” store closures “wouldn’t make any sense” financially.
However, this looks set to change in the future as online purchasing becomes more sophisticated. Argos can take some comfort in the fact that retail always changes.
So, what is the future of the Great British High Street? For more than a year, Mary Portas’s energy, passion and frankly brilliant PR skills have kept media attention firmly on the possibilities of the High Street. But now it’s time for the Government (and local council) to start implementing some of her initiatives. Car parking charges and out-of- town developments are the first stop on this journey. They’re also, sadly, something that the Government (and local council) have not only failed to understand, but have also given a very wide berth.
So, if we can’t have a decrease in business rates, or rental, an online presence to rival Amazon, and the ridiculously low prices to rival Primark, let’s hope instead for some sunshine to level the playing field a bit . . .