Retailers paint a bleak picture of Christmas trading and 2011 prospects
UK Retailers are feeling pessimistic in the traditionally peak Christmas trading period, with only 15% of retailers anticipating that they will have a better Christmas in 2010 compared to 2009 according to research by Cybertill, a supplier of cloud based retail software to independent and high street retailers.
Cybertill polled its 600 retail customers, in sectors including charity, fashion, bicycles, sports, discount, footwear, department stores, off licenses and many more, and 41% said they expect sales to be down, while 37% expected roughly the same levels of trading. Only one in four said they felt confident about 2011. Reasons for this lack of confidence included government spending cuts, and poor consumer confidence following bad news from Eurozone countries.
Regarding the 2011 2.5% 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.
Government spending cuts were also blamed, with 25% of retailers surveyed saying that they had been affected by the cuts and 33% of these affected seeing a reduction of 10%+ in takings. However, 58% of retailers surveyed said that they have not been affected by the cuts.
Ian Tomlinson, Executive Chairman of Cybertill, said, “The high street is facing testing times at the moment, due to the uncertain economic climate. But this survey highlights there are 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 other retailers.”