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Little Christmas cheer for stores as online sales bite

By Margaret Canning

Published 06/01/2016

Fashion sales at Next and, far right, Marks & Spencer have been hit
Fashion sales at Next and, far right, Marks & Spencer have been hit
Marks and Spencer model

Shops experienced a challenging Christmas period after online shopping came of age in Northern Ireland, it's been claimed.

Despite positive feedback from shopping centres such as Belfast's Victoria Square and Newry's Buttercrane, the Northern Ireland Retail Consortium said "anecdotally" that it had been a hard year for bricks and mortar stores.

Its assessment of the year comes as Marks & Spencer tomorrowreveals its Christmas performance, with a fall in sales anticipated for its beleaguered general merchandise division.

And Next yesterday reported a fall in in-store sales and a sharp slowdown in its Directory business. With around 20 stores in Northern Ireland, Next is one of the province's biggest clothes retailers.

Retail Consortium chief Aodhan Connolly spoke ahead of the release of official Christmas footfall figures on Monday for Northern Ireland's high streets. He said: "Anecdotally, it's been a challenging year due to a number of factors.

"Northern Ireland has come of age as far as online retailing is concerned. And the euro rate (currently a euro is worth around 73 pence) has encouraged people to go down south to shop.

"Because of those factors, it has been a challenge getting people to spend time in town centres, but I feel our retailers have been meeting that challenge head-on. They've worked really hard to provide value and to make it a great experience to shop in town centres."

Ulster University retail expert Donald McFetridge (right) said he anticipated disappointing results for Marks & Spencer tomorrow, with a likely fall in its general merchandise division, including clothing and homewares.

"Fashion/drapery accounts for approximately 90% of GM at M&S, but it is fashion that has let them down, yet again.

"I also think they will be presenting a set of very good results from the food side of their business. It's such a shame that they can't do with fashion what they do with food."

Next blamed unseasonably warm weather for a "disappointing" performance in the run-up to Christmas as it posted a fall in store sales and saw a sharp slowdown in its Directory business.

It admitted that disappointing online sales were compounded by poor stock availability - and competitors catching up with the service provided by Next Directory.

The retailer said full-price sales fell 0.5% across its stores in the 60 days to December 24, while sales across its Next Directory online and catalogue arm lifted 2%.

Mr McFetridge said the Next results reflected problems in mid-market fashion including "increased competition, both in-store and online, more discerning consumers, changing consumer behaviour, intense price competition and heavy discounting".

But he said Next was a "formidable force" on the high street and would bounce back.

"Wisely, Next do not discount heavily and this, I believe, is very much to their advantage going forward.

"Their results are being seen by some analysts as a portent of more bad news to come in the mid-market retail fashion sector."

20

Number of Next stores in NI

73p

How much euro is worth against the value of sterling

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