Wednesday, 6 January 2010

Retail sales figures are looking up

Retail sales figures are looking up. Next up 3.22% for 22 week period. M+S a disappointing 0.8% increase,poor no matter how much sir Stew is trying to spin it. John Lewis is the big winner so far with 15.8% up and 10.4% up on 2007.

6% improvement was the unofficial C@W Dec 09 (+) guesstimate overall. That looks like it might be a little too low and will go a long way towards offsetting the poor November figures.

But, before all the congratulatory cigars are smoked its worth remembering that 2008 retail figures were very poor. KPMG reported that their survey showed the worst December figures since they began recording them. It would be almost impossible for the sector to perform worse in 09 than in 08. In '08 pretty much only thye food sector showed a plus. This time the performance is far better across the whole sector, but clothing doesn't look like its made a big recovery. Majestic Wine's figures look very good, 11.5% up, but with the collapse and closure of First Quench and their Threshers rivals,so they should.

For consumers there is some bad news on price inflation. 0.2% rise in inflation from November to December. This is going to jump much higher once the VAT cut has worked its way through by the end of January. {It was never going to go up on Jan 01 universally as we predicted a while back. Operationally its a nightmare. With the snow on the ground now is a very good time for repricing.}
The bad news is the inflation is in the food. 5.4% increase in ambient {shelf storage} food. The end of the Vat cut, still weak pound, and a better performing sector, so less need for discounting, is going to put a lot of pressure on food price inflation.


Sackerson said...

M&S is on a "like for like" basis - and yet they're closing 27 stores and making 1,200 redundant. How's that for bullish expansion?

CityUnslicker said...

can't see any value in retail shares either. The big test will also be how many smaller co's go under as they can't pay january rent. My hunch is it won't be too many and that is bullish for the next 2 quarters in this fantasy economy.

Nice post.

Bill Quango MP said...

Sackerson: M+S shares falling at the moment. Mrs Q went to the big sale on boxing day - store shut {fair enough} So she went to the New years day one at Cribbs Causeway. - store shut. {those mrs Q pounds have been spent elsewhere}

Budgie said...

What is M & S for? Seriously, I'm not trying to be facetious. If you want cheap there's Primark; if you want fashion you go to one of the numerous George Davies' spin offs. Why buy Chinese/Romanian/Portuguese at M & S when elsewhere is cheaper?

Demetrius said...

But what are people buying? Is it now deferred necessary replacement goods, like my trainers finally fell apart? Is it compelled, such as all those rushing to get into digital TV before the switch off, or what?

Sackerson said...

To me, the M&S proposition was the reassurance that its stuff would never be duff, even if it was very slightly overpriced.

T. P. Fuller said...

I have always stood by the M&S lingeries section.
Indeed I am now banned from the Godalming branch for this very reason.

Budgie said...

When M & S was made in the UK (or Israel) then the stuff was good quality for the price (a bit more than BHS or C&A). Now it is the same as every other cheap clothing outlet but is still more expensive. M & S has lost the plot.

Letters From A Tory said...

Same with house prices in that sense - they were so low a year ago that it's almost common sense that they will have increase by this year. Surely we need to compare all these figures back to 2006/7 data?

James Higham said...

All indications are that things are going to crash. Faux slight rises will always occur prior to that. Batten down the hatches and get ready.

Budgie said...

LFAT said: "it's almost common sense that [house prices] will have increase[d] by this year".

How complacent can you get? House prices have only risen because of QE. When QE is removed and interest rates rise this year, property prices will decrease. Houses are still above long term values.

Bill Quango MP said...

Budgie: M+S had no choice. They had to import their goods and took a quality cut to keep profits up. But not on everything. M+S is always going to have a problem being a top end brand in a recession. Waitrose basics was a very good idea that seems to have worked. M+S will follow. John Lewis have discounted their way to turnover and what their profits are remains to be seen.

Demetrius: Too hard to tell what is being bought. For me its the stuff i didn't buy last year like a new TV and new winter clothes. {here I should confess, am an M+S rugby shirt fan. Clothes that make you look your age, or even older.}

T.P Fuller. May I recommend a visit to Ann Summers as an alternative {I once had an interview arranged there that I chickened out of.}

Laft/budgie. I think Lfat means that 2009 house sales must be higher than 2008 as sales fell so far.

James Higham. I thought we might just dodge that second crisis due to election and optimism and change of message.
Now...not quite so sure.