Calm isn’t a word you’d usually use about retailers the week before Christmas. But with the big day just a week away, there seems a reassuring absence of panic among the UK’s leading retailers.
That might partly be down to the good planning that is vital to a successful festive season, but also because for the majority of retailers Christmas seems to be going more or less to plan. It’s not going be spectacular but after last year’s turmoil, 2009’s festive build-up has been pleasingly upset-free.
A bit like the year as a whole, Christmas has the potential to pleasantly surprise. Reading our review of the year (p28) serves as a reminder of just how dark the mood was at the start of 2009, as Woolworths closed its doors for the final time and the list of festive retail failures seemed to grow almost daily.
In that context, the sector’s performance has been nothing short of remarkable. Most retailers have managed to grow their sales and profitability despite the harshness of the recession, while the dramatic re-rating of retail shares showed just how much confidence the City has in the sector.
In fairness, policymakers have played their part. The temporary VAT cut may not have made much difference but rock-bottom interest rates have, and meant that consumers – those in work at any rate – have felt much better off this year than they did in late 2008.
But the adversity of recession has shown retailers at their best. The vast majority have managed their cost base and their stocks expertly, enabling them to respond to the recession by offering real value to consumers while managing to avoid wholesale pre-Christmas markdowns.
Retailers have accelerated their cross-channel offerings too, and moved quickly to capitalise on the weakness
or demise of competitors. It’s meant that the polarisation between the strong and the weak has widened – and this will continue in 2010 – but we end the year with a more stable retail sector and fewer multiples on the brink than we’ve had for a long time.
Retail Week returns on January 8, but you can continue to keep up with the retail news online, which will be updated at retail-week.com as it breaks throughout the festive period.
In the meantime though, thank you to all our readers and advertisers for your support in 2009, and from all of us here at Retail Week, our best wishes for both a happy and successful Christmas.
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