The days just after November pay day are some of the busiest for retailers, with many in the current economic climate dependant on successful Christmas sales. This week and weekend to come is as critical as any and so the snow, ice and consequent travel disruption will be quite damaging. The damage could even prove fatal. Only yesterday JJB for example saw 20% of it's value wiped off when it warned the city that it would break banking loan conditions, their announcement discusses how they are basically pinning their hopes on a strong Christmas, well so far so bad, their sales in December so far will be a fraction of what they were planning on - I wonder how long the company can limp on and if already they are breaking the terms of their loans whether bankruptcy is a question of when rather than if...
Of course depressed sales over Christmas are hugely problematic in terms of cash flow, also they mean that a lot of stock bought for anticipated Christmas sales go unsold and have to be heavily reduced to shift, often at below cost prices. This is why Christmas 2009 was not as bad for retails as 2008 as they had largely estimated demand more accurately and so been left with less unsold stock.
Data now out. Retail footfall down 12-17% last week due to the weather with online sales up 62%. B&Q 90% rise in shovel sales!
ReplyDeleteOk so 'Snow days' post needs an update, two of the key weekends in the 'golden' month of December have been rather compromised... The impact of this is likely to be quite serious for a number of retailers and will result in heavy discounting already but through January. Worth remembering though that Jan 09 was plagued with snow & so if the weather does improve it will be quite easy for retailers to report strong like for likes the other side of Christmas.
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