Accountancy group BDO have released information that sales figures for high street clothing stores have dropped by up to 2.9 per cent in September 2014. Usually September is one of the most profitable months in clothing retail calendars, not only because it is the key month we begin to see Autumn/Winter clothes available but because Fashion Week falls in September. However it seems the warm weather held back the demand for Autumn/Winter clothing this year, as it seems consumers are waiting to embrace the new season‘s fashion once the winter weather arrives. Some of the more savvy retailers used targeted discounting and promotions to help drive sales, though the success of this strategy was not felt universally. Visa Europe said that their spending data revealed that clothing sales fell by the largest percentage, 6.5pc since April 2013 in September.
Helen Dickinson, Head of Retail at KPMG, said: “There is no doubt that the weather does impact retail performance. We see this most starkly in periods of extreme or unexpected conditions such as the country grinding to a halt in December last year due to adversely snowy conditions or the Indian summer in late September this year.” “As a result sales will be gained or lost and once forgone, a significant proportion of it will not be regained given the discretionary, ‘of the moment‘ nature of so much of our shopping activity.”
The warm weather would have tested retailer‘s production and merchandising schedule. Some high street shops tried to contend with the weather by introducing mid season sales although this resulted in reduced margins which are already under considerable pressure from rising costs.
“Consumers have been spending, albeit cautiously, throughout the year, but this is proving very brittle. In this environment where we are seeing further business failures combined with continuing global instability, consumer confidence is being knocked which is reducing their willingness to spend,” summed up BDO‘s findings its head of retail, Sophie Bevan.
“Retailers may well find it hard to entice consumers into spending again and we are already starting to see early, targeted promotions to try and do this. Our advice to retailers, however, is to hold their nerve and avoid a repeat of last year‘s early discounting that has eroded margins in previous years in the run up to Christmas.”
Interestingly sales figures have grown for the hospitality and catering industry, as people continue to eat out despite any given weather condition.
Yet British designer clothing brand Ted Baker said demand for its autumn/winter collections had been good despite September‘s unusually warm weather, as it posted a 24 percent rise in first half profit.