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How will the Christmas period shape up for retailers?
With the Christmas period fast approaching, retailers are preparing for what should be the busiest time of the year for high street trading.
The Christmas trading period is a crucial time of year for retailers as consumers hit the streets in their millions. While the prognosis is uncertain, the forecast for Christmas is not all doom and gloom for retailers however. September and October retail figures were higher than expected and seemed quite buoyant, es pecially when compared to previous years. The November trading numbers will give retailers a more telling picture on what to expect in the run up to Christmas but it is essential, none the less, to be prepared for whatever the climate might be.There are a number of issues that are thought to potentially affect high street retailers in 2007. Following the credit crunch that hit many banks earlier this autumn, increased borrowing costs and concerns following analysts predictions that the UK's economic growth may slow down over the next year may make consumers more nervous about borrowing money for the festive period. Funding lines may also become tighter for high street retailers.
In addition, retailers and consumers alike are being affected by structural issues such as the recent rise in commodity and oil prices. The rise in petrol prices has meant that many retailers have had to take in to account the added cost on shipping and distribution, while the mortgage issues caused by the credit crunch has meant an increase in letting fees.
There is a silver lining however as the Bank of England is likely to keep interest rates static and may even consider reductions in the New Year in order to try to reduce the impact of such structural issues. Even though this is a step in the right direction, there are several things that retailers can do themselves in order to ensure their survival on the high street.
Effective cash management will be even more fundamental for high street retailers. As December marks the final quarter in many retail organisations' calendar, retailers may wish to reconsider their expenses. In particular, with the added concern of both consumers and retailers moving online, retailers must weight up the costs of their overheads against the benefits of their presence on the high street. Another area for retailers to manage is entry control. Monitoring stock levels and ensuring a quick turn around of products could help retailers maximise trading while minimising waste.
These issues show that although there is no cause to cancel Christmas just yet, there is a real need for companies to diversify in order to stay ahead of the game during the Christmas period.
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