As the end of the year draws nearer retailers can look back reasonably contently at the last 12 months, according to the Head of Retail for Large Corporate at Lloyds TSB Charles Lamplugh.
Talking to Retail Gazette, the banking representative said: “When people woke up at the beginning of 2010 they probably thought it wasn’t going to be a great year.
“But as it turned out people have still been spending online and going into shops to spend their money.”
Encouraging consumers to part with their hard-earned cash may not have been quite as easy as Lamplugh implies though, with figures from the monthly British Retail Consortium-KPMG Retail Sales Monitor showing slow growth for much of the year.
Even Office for National Statistics data, which tends to paint a more positive picture of retail industry performance, showed that year-on-year retail sales declined two months in succession at the end of the summer.
However, the Lloyds TSB boss suggests many retailers were prepared for cautious consumer spending and factored this problem in early, perhaps resulting in stronger than expected sales.
“At the beginning of the year retailers worked out what was and wasn’t profitable and acted accordingly, as well as tightening reigns on their supply chains,” he explains.
“People were looking quite happily at these areas and setting themselves up for an austere year but it turned out to be reasonably good year for those who made the right management decisions early in 2010.”
Strength of management is something Lamplugh sees as vital to the success of any retailer, but consumer interaction is up there in the list of priorities.
“Retailers need to talk to their customer and understand what their customers want - I think engaging with people is terribly important.
“If you are not talking with customers you are going to run into a problem. You can steer them but their views are vital too.”
Consumer confidence is on the ropes at present and likely to get another battering as government austerity measures start to land blows at the turn of the year, making it even more important for retail firms to engage with those who they want to buy their goods.
Many commentators have indicated that the VAT rise will play a major role in this further reduction in sentiment, but Lamplugh does not agree.
“I think the VAT increase affecting retail is a bit of a red herring actually,” he states.
“It is only an extra 2.5 per cent, it made no difference when it came down and quite a few retailers probably expected it to come into play in August so will have already readjusted prices accordingly.
“Retailers will use it to speed up people coming into shops, but it won’t be a clincher. If you are going to spend £200 on a dress is £5 extra going to make a whole lot of difference? I don’t think it does.”
Lamplugh’s day-to-day role at Lloyds TSB involves him aiding and advising corporate mid-market retailers on a variety of issues such as credit advice, corporate finance and private equity houses deals.
He has been at the bank for close to 30 years, working at various branches across London as well as the company’s internal audit department. Following that Lamplugh spent three years at the retail bank in the channel island of Jersey before entering the corporate arena.
He has now been specialising in mid-market retail & corporate banking for around seven years.
“Working in retail has been a lot of fun, I’ve really enjoyed it,” he explains. “It is an exciting sector and it is very tangible because anyone who is interested in businesses like White Stuff, Jaeger or Moss Bros can just go and check out their respective shops.”
Lloyds TSB works with these aforementioned companies, as well as fellow retailers such as Fortnum & Mason, Liberty, The White Company and All Saints, and they form part of a book of “good retailers” the bank is trying to add to
Lamplugh highlights “the slightly quirky” White Stuff as an example of how firms can successfully engage customers, citing the host of features on its website such as evening entertainment and charity events, and adds that this type of customer engagement is “fairly key” for retailers today.
But it takes more than this to survive in this tough industry, and especially one where flat-line growth is expected to be a key feature of 2011 and beyond.
“Buying goods, selling them, making profits; on the surface it seems simple, but the mechanics of retail are actually a whole lot more complicated.
“It requires tremendous skill, not just at the top level of the business but the second management tier as well.
“You can’t over emphasise the importance of strong management. If a retailer is properly set up and has the right management skills at all levels there is no reason why it shouldn’t succeed.”