Traffic Jams

The nature of retail has always been a moveable feast. But generally retailers have been able to rely on a certain predictability of trade and to make informed assumptions about how shoppers will behave.

Yet speak to some retailers and it seems those patterns are changing.

Traditionally busy times, such as weekends, are losing out to busier weekdays and retailers trying to plan the smooth operation of their stores are left wondering what shoppers will do next.

The chief executive of one fashion retailer says: “We have noticed for some time that there has been a shift in the daily sales mix, with Saturday sales dropping as a percentage of the weekly mix by up to three percentage points.”

For some retailers, the traditional pattern has gone completely. “The one thing that is absolutely certain is that there is no certainty,” says Gary Grant, chief executive of toy chain The Entertainer. “There is no pattern at all. It’s erratic, uncertain and changeable, so it is not area or shop based.”

DSGi group operations director Sebastian James agrees. “It’s weird at the moment. We have had tremendous days followed by quiet days,” he says, adding that weekdays are also proving busier.

The chairman of one large retailer says: “Trading has become more evened out and Sunday has got much bigger.”

At The Entertainer, the change in pattern has been evident since February; at DSGi, for the past couple of months. Others say the erratic patterns have only really kicked in in the past couple of weeks and are apparent even when you strip out the effect of differing bank holidays.

But there are retailers bucking the trend. “Our figures have been relatively consistent throughout,” says John Lewis director of selling operations Nat Wakely.

However, he admits the retailer is somewhat protected by its wider range. “If you have a very wide assortment then you are going to attract a wide range of customers and you will iron out those peaks and troughs,” he says.

Trafford Centre director of operations Gordon McKinnon agrees.

“It is very difficult to predict and there is no particular sector that is suffering,” he says. “There is really no pattern other than perhaps the larger stores do seem to be doing particularly well, which may be that during economic uncertainty customers go to the big names.”

So what are the factors influencing the change? It could be attributed to the recession - except it’s not that sales aren’t happening, more that they are happening at less predictable times. “We are trading up on last year but it’s just that it’s all over the place,” says Grant.

Wave of uncertainty

Figures from Experian Footfall show that despite the uncertain financial climate the normal pattern of footfall seems to be holding - although it has fallen on retail parks following the VAT rise earlier in the year. “People aren’t inclined to buy big-ticket items so they seem to be going to the high street instead,” says Experian Footfall senior quantitative analyst Anita Sharma Manan.

Certainly the recession, coupled with uncertainty pre- and post-election, has had an effect on confidence. “There is a high level of uncertainty,” says Grant. “There are enough things to unsettle people, therefore confidence has dropped and that is making people more cautious.”

But he says the reaction from customers also isn’t following any sort of pattern, adding: “When it was bad in the last quarter of 2008 it dropped quickly and it was consistently and constantly bad.”

The recession has led to a change in consumers’ style of shopping too, according to Bluewater general manager Andrew Parkinson, with people turning it into more of a leisure pursuit now. “People are making more of a day of it now. Leisure time is really precious to them,” he says.

Some attribute the shift to the impact of the internet. If shoppers are researching purchases online, they could be doing so during the week, checking the product out in person at weekends and placing their final order online at the beginning of the following week. But, again, there is no emerging pattern to support this.

Another theory is that the weather is mostly to blame for customers’ strange behaviour. “We haven’t had a prolonged period of nice weather, so people are wanting to savour the nice weekends if and when they come,” says Envision Retail managing director Jason Kemp. This ties in with some retailers’ assertions that the erratic trading has only really taken place in the past couple of weeks as the weather has turned.

“We have dipped in the last couple of weeks in May but it’s not been anything drastic and once the weather settles into a pattern we will pick up again,” says Parkinson.

Combined effect

Boots UK head of trading operations Mike Stredder agrees. “Short-term changes in trading patterns are often seen in the early part of summer as customers make the most of the good weather and delay shopping,” he says. “This usually settles down into a more normal trading pattern.”

However, New Look group managing director Will Kernan thinks the reaction has been more extreme with the arrival of this summer - indicating that perhaps it is a combined effect.

“During the weather volatility in the past couple of weeks we have seen movements in footfall that are greater than historically in the past couple of years,” he says. “The shift of footfall to conversion is also more volatile and reactive to the weather than we have seen previously.”

The fashion chief executive who did not wish to be named believes the volatility is also down to a change in the fashion customer. “I believe that this is being partially driven by the buy-now-wear-now mentality that we are seeing. She is leaving her buying decisions to as close to her day or night out or occasion as possible and looking at the weather or the latest trend before buying,” he says.

Such behaviour is making business even more complicated and speeding up the fashion cycle further. He adds: “If you launch a particular type of, say, denim shorts into the stores but the weather is freezing, previously she would have either purchased them and worn them at an appropriate time or waited until the weather improved and then bought them.”

Now the customer doesn’t buy them because it’s too cold and goes for the newer version in store in a couple of weeks, leaving the retailer having to mark down stock.

However, most retailers are confident that things should settle down soon. “It takes four to five days of warmer weather to change the customer mindset that summer has come and we have only just had that, so behaviour in the past couple of days has only just returned to normal behaviour,” says Kernan.

McKinnon says consumers shop later during the warmer weather and retailers are opening later as a result. He also says the effect has been coupled with the change in weather but that, like at Bluewater, trade is good at the Trafford Centre with turnover up 4% year on year in April.

The belief that the unpredictability is down to the weather means most retailers are not too worried that it is a marker of a more fundamental shift in their customers’ mindset.

“Is it a trend that is long enough for me to think there is a big change in customer behaviour? No it isn’t,” says Kernan.

James agrees that a longer-term change in habits is unlikely. “It’s hard to imagine what change in behaviour would drive a sudden rush to the stores on a Wednesday and deserted stores on a Thursday,” he says.

He believes that it is a combination of two major factors. “Both sentiment and weather has been quite erratic,” he adds.

Rocky road

As to when things will get better again, retailers’ opinions are mixed. Grant believes a more settled pattern is still some way off. “I think it will be 2012 before things settle down to become normal again and then the big debate will be what is normal,” says Grant.

Parkinson agrees. “In the months going forward there will definitely be some unpredictability because the Government is going to give us our medicine,” he says.

Aurora Fashions chief executive Mike Shearwood says it may be something that retailers have to get used to. “I’m afraid volatility and unpredictability are now a feature of everyday retailing; the consumer is in charge of what, when and how they buy,” he says.

In the meantime, apart from maximising their stores for trade, there is little more that retailers can do. James sums it up well, saying: “It’s not particularly worrying - we’re not like a grocery retailer in that our goods don’t go off if we sell a day later - it’s just a bit odd.”