A mixed outlook for 2012 according to REC Sales & Retail

A mixed outlook for 2012 according to REC Sales & Retail

Following post-Christmas trading updates along with the official figures from the British Retail Consortium (BRC) and Office for National Statistic (ONS), members of the REC’s Sales and Retail specialist sector group is predicting a mixed outlook for 2012.

In the past few weeks, more than 50 major chains have reported on trading conditions in the run-up to Christmas. Their updates indicate that it was a mixed picture with leading retailers such as John Lewis, Sainsbury's, and Burberry reporting strong holiday sales. However, other retailers like Argos, HMV and Tesco reported weaker trading with the latter even reporting that it will no longer be building large, out-of-town hypermarkets.

Coupled with the most recent retail figures reported by the ONS, these figures illuminate current consumer behaviour and paint an interesting picture for the year ahead.

Antony Wroe, Chair of REC Sales & Retail said:  “Whilst at first glance we see a mixed picture, the reality is that retailers have responded to the squeeze on consumer finances by cutting prices in store at the expense of their own margins. Indeed, even for the retailers who reportedly did ‘well’ over Christmas, their profits remain well below  the level of previous years.

“With low consumer confidence, shoppers remain reluctant to spend and are only encouraged by significant discounting. Retailers are competing hard on price and their margins are feeling the effects. Looking ahead, the next few months will be quieter than the Christmas period as consumers focus on saving after the pre-Christmas spending.”

He concluded: “However, it’s not all doom and gloom. This year, recruiters can look forward to both the Diamond Jubilee and the Olympics, with the summer period generating significant employment opportunities. Retail sales will undoubtedly be driven by an increase in international visitors over an extended season of tourism throughout May, July, August and September.”