The case for a cut – not just from the retail sector, but also from the housing market – has been compelling and the economy as a whole needs the stimulus a cut would bring.
We’ve been writing for some weeks that fashion and furniture have been the two sectors that have been taking a bath and this week the firm evidence came in the shape of a Moss Bros profit warning and disastrous trading from ScS.
Neither will have come as a surprise to readers of Retail Week and the woes of these two smaller quoted players will be reflective of those facing many other retailers, both public and private.
But, still, the picture is mixed. Perennial strong performers from giant Tesco to up-and-coming Asos continue to power ahead, in Tesco’s case bouncing back from a weaker previous quarter.
That’s not to say those that are struggling are bad retailers, but the trend clearly indicates that undifferentiated retailers selling commodity products and lacking scale are going to find life tough.
2007 won’t be a vintage Christmas, but consumers will spend. However, even if interest rates do fall, shoppers will still need a good reason to venture onto the high street. And if specialist retailers fail to offer that, no one can be surprised when their spend goes either to the grocers or online.
Making Christmas ad up
It’s the time of year when retailers go to town on their advertising and this year it’s all about celebrity and glamour (page 26 and back page). Whether it is Julie Walters serving at Asda, Lulu shopping for a Morrisons Christmas dinner or Antonio Banderas cavorting in the M&S ad, this year’s campaigns are simple, upbeat and fun.
There are plenty of examples in years gone by of retailers that have succumbed to the too-clever-by-half whims of their ad agencies. But not many shoppers live in Soho. And at a time when it would be easy for consumers to sink into gloom, its absolutely right that this year’s ads are trying to bring back the feel-good factor.
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