Belfast Telegraph

Judging by the shops, the recession's far from over

The retail sector may have had a better June and July but it's still a bloodbath on the High Street, according to Donald C McFetridge

Recently-published data from the Office for National Statistics (ONS) in respect of retailing in June and July has, at last, brought a brief glimmer of hope to struggling retailers.

Indeed, there were some raised eyebrows as gloom-mongers and nay-sayers noted the 0.3% rise in the ONS July statistics and some raised champagne flutes in a few boardrooms as June's figures were sharply hiked upwards to 0.8% over the month.

However, it should be noted that these figures largely reflect a plethora of promotions on fuel and high levels of discounting on the High Street - factors which encouraged consumers to part with their cash.

The stronger June performance has undoubtedly increased the pressure on the ONS to revise its initial estimate of an anticipated 0.7% slump in the second quarter.

Some analysts are even predicting that these statistics add to existing evidence that the economy has fared much better at the end of the second quarter than the ONS had initially guessed. Let's hope they're right.

Initially, predictions were gloomy, due to low levels of sales in the fashion sector. Notwithstanding these first green shoots, many are still worried about the rest of August and there are concerns about the autumn and Christmas and the New Year.

As it stands, there will be further extensive discounting and reductions in clothing and fashion ranges which have failed to shift off the shelves. Canny consumers will still be able to pick up bargains in the fashion sector as retailers attempt to shift summer stock.

While this recession has obviously had a massive impact on retail spending, that's not the full story. Consumers have the cash; they are simply reluctant to part with it if they are not offered appealing product offerings and if the pricing is not within their spending parameters.

It's time for retailers to really get back to more fully satisfying customers in terms of attractive product ranges at appropriate price-points and this, of course, can be actively stimulated, or encouraged, by planning and promotion.

We need to stop wittering on about dying town-centres and car-parking charges and get back to basics. The global picture is one where consumers actually want to shop out of town in modern retail facilities and, yes, research demonstrates they do want to drive there in their cars.

It's extremely difficult to prove (otherwise it would already have been done through scientific research, rather than scare-mongering) that there is a direct causal relationship between out-of-town development and the demise of town-centres.

There are many other factors which need to be taken into consideration when discussing this matter, but all too often they are omitted in an attempt to sensationalise the issue. Customers call the shots - not the planners.

Sectors to watch out for this autumn are: fashion, furniture and electrical. Even that paragon of retail excellence, Marks -amp; Spencer, has admitted that there are problems in the mid-market fashion sector.

Over-segmenting the market can lead to problems. In short, too much consumer choice can lead to consumer confusion. And, we all know what confused consumers do - they move on and shop elsewhere, or they simply don't spend at all.

This autumn we'll, unfortunately, witness further store closures and rationalisation in the retail sector. Many retailers are more than a little concerned about their recent performances and many are struggling with their burden of debt.

Store groups like HMV and JJB Sports remain extremely vulnerable as we approach the autumn/winter trading period.

There will be bargains to be had in all of these sectors and price competition will be rife.

While the ONS figures provide a glimmer of hope in respect of recent trading patterns, it's only that: a glimmer.

This recession is far from over. And the High Street is still not in the clear.

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