There was welcome news today in the latest BRC and KPMG sales data. Total retail sales growth in July was the best since January, and like-for-likes also advanced.
Admittedly, much of the growth was driven by promotions. And the weather, no friend of retailers for much of the past year, for once lent a helping hand in categories ranging from food to women’s fashion.
But perhaps most importantly, in the first full month of trading data since the UK’s vote to leave the EU, there was no sign of a Brexit effect – despite surveys showing a dent to consumer confidence following the referendum.
It wasn’t surprising that the vote at first sent waves through businesses, citizens and politicians alike.
“Retailers should use the breathing space they have now to prepare for a potential rollercoaster ride”
George MacDonald
Equally, as the initial shock died down, it’s not surprising that normality has to some extent been restored. However, it is likely that there will be more torrid times to come.
Business as usual was the mantra adopted after the vote, but achieving business as usual – even in calm conditions – is often easier said than done.
So retailers should use the breathing space they have now to prepare for a potential rollercoaster ride.
There are already pointers from big names such as Next and Travis Perkins about how choppy waters such as the devaluation of sterling can be navigated, whether it’s more sourcing from the UK or greater efficiencies.
The July industry sales, generated at markdown or not, are a good base from which to build. Retailers’ mindset should be, to borrow a famous phrase, pessimism of the intellect and optimism of the will.
A healthy dose of realism is essential, but this could be a time when ambition comes into its own.
Now is a chance to do a double-take and ensure the right strategy is in place, backed up by the financial foundations and executional capabilities to turn potential challenge into opportunity.
Morrisons’ fresh Ocado deal
Morrisons boss David Potts’ description of himself as a “shopkeeper” in Tuesday’s statement about a renegotiated deal with Ocado was refreshingly down to earth.
Sometimes the reality of retail and its focus on the customer is obscured by all the background noise, but shopkeeping is what it’s all about.
These days it is increasingly done online, bringing additional complexity and expense.
The new deal between Morrisons and Ocado looks sensible, bringing some benefits to each.
If all goes well, it’s a good example of the marriage of realism and ambition, and practical shopkeeping.
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