It hasn’t been much of a week for the feelgood factor.
The data protection fiasco at HM Revenue & Customs, affecting 25 million people, will hardly have helped make already nervy consumers feel more secure about their finances.
England ’s dashed hopes of qualifying for Euro 2008 prompted, perhaps unsurprisingly, a profit warning from Sports Direct, but the more important effect may be the reinforcement of the gloomy general mood.
The dismal sentiment was evident in City attitudes to retailers. As we highlight in today’s edition, Retail Week’s share price movement chart shows only three risers over the week. We usually list five, and it’s the first time in years that two spaces on the list have had to be left blank.
But yesterday’s Super Thursday set of results and trading updates was not bad at all. There were the obligatory expressions of caution about the outlook, but there were also reasons to be cheerful.
Profits were up at Halfords. Mothercare reported a “transformational” first half as it integrates Early Learning Centre and continues to grow internationally. And sales are motoring at Morrisons as it benefits from marketing and in-store improvements.
The whole retail sector undoubtedly faces tough conditions in the new year, but there will be no benefit in sitting back and letting external conditions completely dictate performance. As yesterday’s updates showed, it’s possible to make progress on a variety of fronts.
To quote the legendary industrialist John Paul Getty: “Without the element of uncertainty, the bringing of even the greatest business triumph would be dull, routine and eminently unsatisfying.”
Retailers at the moment certainly have plenty of uncertainty. Their lives are anything but dull and routine. All the sector could do with now is a few more triumphs.
One indication that there are opportunities as well as threats to retailers is TK Maxx’s decision to launch its HomeSense furnishings fascia in the UK next year.
Many furniture groups have not been finding the going easy, so it’s a brave decision to launch – especially if next year is as uncomfortable as the pundits expect.
But TK Maxx is typically on the money. Its established UK business, driven by designer fashion at discount prices, is one of the sector’s quiet success stories.
If HomeSense makes a similar impression on shoppers, it might be a shot in the arm for the homewares sector generally.
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