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Snow excuse for retailers


The snow is unlikely to cause too much damage to retailers’ profit and loss (P&L) forecasts, according to Nick Bubb, Senior Retail Analyst at the stockbroker Arden Partners.

With Christmas and January sales periods set to provide a multi-billion pound boost to the industry, Bubb believes we will soon be talking about retail success stories rather than shopping nightmares.

He explained that the snow, which had such an effect on retail that Brent Cross Shopping Centre in London had to close last Saturday, will have been unhelpful but not disastrous.

The analyst also indicated that when the post-Christmas spending period gets underway a number of retailers have “easy comparatives with the snow disruption of a year ago”.

Bubb said: “The shift of spending may have slightly adverse gross margin implications, but on the whole we don’t think too much damage will turn out to have been done to P&L forecasts, with the possible exception of Christmas dependent retailers like HMV.”

His comments come as the Retail Traffic Index from research firm Synovate showed non-food retail footfall in the UK was down 8.8 per cent year-on-year in the week to December 18th.

On Saturday, when Brent Cross had to close its doors to the public due to safety reasons, shopping footfall was 24.3 per cent down on the same day in 2009.

Dr Tim Denison, Director of Synovate Retail Performance, commented: “At a time when retailers were looking to play catch up, after the snowfall at the start of the month, the latest turn in the weather has dealt another cruel blow.

“We thought that Christmas 2010 would be remembered for shoppers making the most of pre-VAT increase prices, rather than the impact of a white-out.

“Retailers will have to hope that the severe weather disappears by the end of this week, allowing shoppers at least one week of indulgence to hit the high streets bargains before the year ends.”

Some UK retailers, such as home and DIY specialist B&Q, have started their sales periods already, while fashion businesses TK Maxx and Kurt Geiger are among the businesses set to roll out their discount ranges in the coming days.

A recent study from online shopping comparison site Kelkoo and the Centre for Retail Research suggested that January sales could provide a £22.5 billion windfall to retailers, which will come as a welcome boost to those affected by December’s snow.

Published on Wednesday 22 December by Editorial Assistant

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