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Retailers paint a bleak picture of Christmas trading and 2011 prospects

According to a recent piece of research, UK Retailers are feeling pessimistic in the traditionally peak pre-Christmas trading period

GENERAL MERCHANDISE

Retailers paint a bleak picture of Christmas trading and 2011 prospects

Only 15% of retailers are anticipating that they will have a better Christmas in 2010 compared to 2009, according to research by Cybertill.

Cybertill polled its 600 retail customers, in a variety of sectors including fashion, bicycles, sports, discount, footwear, department stores, charity, off licences and more, and 41% said they expect sales to be down this Christmas, while 37% expected roughly the same levels of trading. 

When asked about their outlook for 2011, only one in four were confident. Reasons for this lack of confidence included government spending cuts, and poor consumer confidence following recent economic troubles in the Eurozone countries.  The retailers that did feel confident cited a number of reasons for their positive outlook.  Although a resonating theme was the emphasis on service, as Kevin Grant of independent bike retailer Escape Route, based in Pitlochry, commented, “We are trying to look at ways to retain and develop our customer base. One of our strengths is our face-to-face customer service, offering sound and impartial advice to customers, this is critical in retaining customers.”
 
Another reason for optimism appears to be social media, as high-end home interiors retailer, Graham and Green, believes social media commerce will help them grow in 2011. Darek Szuminski, IT manager at Graham and Green, comments, “We are planning to increase our presence in social media, as we see this as a major opportunity for driving growth in 2011.”

VAT gets even more taxing
Regarding the 2011 VAT rise retailers are split, with 50% of retailers planning to pass the VAT rise onto customers.  37% said that they will absorb the cost, while 13% remain undecided.

First cut is the deepest
25% of retailers surveyed also stated that the Government announcement regards the austerity cuts had affected their business and of those affected 33% had seen a reduction of 10% or more in takings. However, 58% of retailers surveyed said that they have not yet been affected by the impending cuts.

Ian Tomlinson, Executive Chairman of Cybertill, said, “The high street is facing testing times at the moment, due to the uncertain economic climate, as this research demonstrates. But, there are also positives; some businesses are growing in spite of the economy.  They are doing this in a number of ways but central to growth is excellent customer service. It may sound obvious, but too often service levels in store are not seen as a priority, and in these tougher times it is excellent service that can convert ‘passing trade’ into loyal custom. Moreover, retailers of all sizes that have the right infrastructure and software systems in place can reduce their costs and overheads, by streamlining their operations, such as carrying the right stock levels at the right times, and in turn gaining a competitive advantage over their competition.”

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