Words About Things

Retailers are concerned about the possibility of a frugal Christmas despite signs of stabalisation on the high street. Some companies reported rises in sales in September after four months of reduced spending. There is still concern however that some stores will be forced to close for good if they do not do well over the holiday period.

The golden quarter has the ability to make or break. The first quarter of next year will see further distress in the retail sector. I think there will be a few [retailers] coming down with the Christmas decorations.

Retail specialist Robin Knight

A recent survey of consumers found that most intended to spend 15% less than last year on Christmas presents. They expect to spend around £267 on presents and £28 on decorations. Food and drink remains a priority however with an average spend of £182.

One of the most well know names on the high street Marks & Spencer have reported an improvement in sales with the three months to September 2009 only seeing a 0.5 percent drop like-for-like sales from last year. Christmas is a very important time for M&S and a good Christmas would help them to end 2009 on a positive note. Last year they used unprecedented sales to try and lure in hesitant shoppers towards the end of November. They are hoping that their Christmas hampers and other gifts will boost this year’s earnings.

There are always winners and losers when economic times get tough. Whilst some companies struggle others benefit particularly if they offer a cheaper service. So while it is a bad time to be selling pick and mix those who cater for people who are trying to reduce their outgoings are seeing increased sales.

• Discount supermarkets are seeing increased interest from shoppers turning away from the more expensive chains.
• Car hire companies are seeing increased trade from those who are staying within the country rather than going abroad as car rental is a cheaper option than international flights.
• Stores that are focused on disposable fashion, such as Primark are selling more for less. Interestingly mid to high end clothing shops such as All Saints are doing well. It has been suggested that clothing aimed at a niche market is selling better than more middle-of-the-road items.

The stalling economy has had a significant effect on the high street with high profile stores closing as consumer spending being reduced. At times like this you would expect those selling non essential goods to be restrained but the major fashion houses aren’t known for their restraint.

New York Fashion Week featured the combination of dependable traditional items (to wear this season and next) with bursts of bright colours, perhaps designed to combat negativity. London Fashion Week was apparently a cheerful affair also with street photographers more interested in the outfits of those in the front row than on the catwalk.

It is likely to be the high street shops which copy high fashion for the masses who will suffer as people try to reduce their outgoings. Those who are able to afford luxury handbags aren’t hit as hard by the recession, that’s the theory at least. So while luxury gifts are still selling its the cheap copies with small margins which are hit worst.

Paul Smith has offered advice on how to recession proof your wardrobe including the suggestion that you “cheer yourself up with a scarf or a sock, a tie or a belt, adding to your existing look, rather than changing your entire wardrobe.”