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Shopping online is like stepping into a changing room, making it harder to interpret sales figures, writes Jane Bradley
When I worked as a business journalist at the peak of the recession, we used to like to write that Next was the bellwether of the British high street. It was one of those meaty phrases like “trousered” or “solutions provider” which only ever appear on the financial pages. Happy days.
In the case of our “bellwether”, it was a fair point. In those days, whatever happened to Next would often be an indicator of how the retail sector might fare.
When the recession hit in 2008, Next immediately reported a depressed consumer outlook with a slump in sales as early as November 2007, just weeks after Northern Rock sought emergency funding from the Bank of England – the first sign of the financial crisis.
Many others followed suit, with plenty of retailers failing to cling on to solvency quite as well as the stalwart fashion house, which made a recovery, post-recession.
Earlier this week, our trusty bellwether Next jubilantly reported a 1.5 per cent jump in sales over the 54 days before Christmas Eve, buoyed by an off-the-planet 13.4 per cent rise online. I even resurrected the phrase in my report for The Scotsman’s news pages about the update, feeling strangely nostalgic.
However, the days when business hacks could make predictions based on Next’s performance turned out to be over this week, when the second major retailer to report festive sales figures, Debenhams, had the opposite experience. Its own UK Christmas sales were down by 2.6 per cent, despite a rise in its “digital” performance of 15.1 per cent – its one bright spot in an otherwise gloomy trading statement. Its profit forecast is still down significantly.
Therein lies the rub. The rise of internet shopping has caused a lot of the uncertainty. The art of predicting how retailers will perform was developed before internet shopping took hold and the already slightly finger-in-the-air technique is now less reliable, making it