Christmas 2009 will be far better for retailers than many would have expected following a turbulent year for the retail sector.
That is according to the latest report from the KPMG/Synovate Retail Think Tank. The RTT believes that the new retail environment which is now the trading norm – namely tightly-managed stock, adjustments to the levels of demand and emphasis on cost control – all set the tone for this Christmas. And those who get this challenge right will almost certainly be in good shape to face the year ahead, it adds.
The RTT says that margin protection is now the key business imperative for retailers, and even more important than last year as less volume needs to be shifted, given the reductions in forecast sales.
RTT member Mark Teale of CB Richard Ellis says: “Given that the economic panic has subsided since last autumn, retailers will be less apt to be drawn into heavy discounting this year: Christmas will be less fraught.”
And fellow member Richard Lowe of Barclays Retail & Wholesale Sectors adds: “Last Christmas, retailers were going into it trying to move stock as quickly as they could, to generate cash and reduce their overall stockholding. This year stock is far ‘cleaner’ and they will be managing their margin very carefully.”
Bargain hunters may be disappointed because, unlike Christmas 2008/January 2009, bumper sales will not be necessary to shift stock.