Blog: Retail misery marches on
Joe Ayling | 10 April 2008
While our news editor Joe Ayling is in Barcelona this week at the World Retail Congress hearing all about the future of retail from some of the industry’s leading lights, it’s down to me to track what’s happening in the sector at the moment.
And it’s not good news. The March sales results posted today by US retailers paint a gloomy picture, with economic worries, lost shopping days from an early Easter, and unseasonably cold weather all being blamed for keeping consumers away from stores. Department stores and mall-based apparel specialists are among those suffering the heaviest losses.
Are there any bright spots? Well, it seems people are still shopping at discounters as they try to save money, and there is also a train of thought that suggests the negative impact of the shift of this year’s Easter holiday from April into March could turn to a positive for April’s results. By then, the dreary March should have given way to warmer weather too – helping to encourage purchases of spring fashions.
It has also been pointed out that tight inventory control following the disappointing holiday season means retailers aren’t carrying too much excess stock at the moment, helping to minimise markdowns and maintain margins.
Is all this clutching at straws? Well we’ll have to wait a couple of weeks to find out. But I’m also conscious that the media are being blamed for doom-mongering, and it’s important to remember that consumers are still buying clothes. Gap Inc’s March sales might have been down 12% - but it still shifted $1.37bn worth of apparel, which is no mean feat by anyone's standards. And a study yesterday forecast that online retail will continue to be a bright spot in the industry – with apparel emerging as the largest category.
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