Blog: Leonie BarrieConsumer spending curb continues

Leonie Barrie | 15 December 2008

More proof of the problems being faced by the UK retail sector came with a survey published last week which revealed British retail sales fell at their sharpest annual pace in more than three years in November. The figures published by the British Retail Consortium are seen as a grim sign of what retailers can expect next month as consumers continue to curb their spending in the run-up to Christmas.

The data showed total retail sales fell by 0.4% year-on-year in November, and were down 2.6% on a like-for-like basis. Despite extensive heavy discounting, clothing and footwear fell further below year-earlier levels.

Looking ahead, things could well get a lot worse before they begin to improve, another report says. Verdict Consulting warns high street retailers should brace themselves for one of the worst years on record in 2009, with growth not expected to return until 2014. The research suggests UK retail spending growth on the high street will shrink by over 4% next year.

The impact of the economic slowdown continues to be played out at UK high street chain Woolworths Plc, which has begun a store closing sale at its 800 branches across the country as it looks increasingly unlikely that the business will be sold as a going concern. Some shops may close before the end of December, and the administrator is to consult with Woolworths' 30,000 staff over possible redundancies.

However for Spanish retailer Inditex, owner of the Zara fashion chain, growth at new stores in emerging markets such as Asia and Eastern Europe has helped push nine-month profit up 2%. Sales in the period rose 11% to EUR7.35bn. Europe's biggest clothing seller said results for the six weeks since the beginning of its fourth quarter show a similar pattern of growth as consumers snap up its fast fashions.

Canadian T-shirt, fleece and sock maker Gildan Activewear is to phase out its sock finishing operations in the US by the middle of next year, after its fourth quarter profit nearly halved and negative market conditions look set to hit its first quarter results. The manufacturer said sales in the quarter rose 27.4% to $324.7m, but were offset by higher cotton and energy costs and an unfavourable product-mix.

Of course one way that companies can achieve a competitive edge is by having the right systems in place to juggle constant order changes and short product lifecycles across complex global supply chains. So here at just-style we’ll be kicking off the New Year with a dedicated PLM (product lifecycle management) hub to help clothing and footwear firms keep up-to-date on the latest products, developments, applications and roll-outs specifically aimed at them.

 


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