Retail Roundup: ONS figures reveal extent of June’s summertime blues

20th Jul 2012

The wettest June on record left retailers reeling this week as Halfords, Kingfisher, Mothercare and JJB Sports reported back on tough trading exacerbated by the endless rainfall. But it wasn’t all doom and gloom, as sales reports from a handful of retailers showed shoppers can still be persuaded to brave the storms or shop online.

This week official retail figures by the Office for National Statistics (ONS) confirmed what most of the industry had already predicted: nothing could save June’s washout weather, as even the Jubilee failed to deliver a boost of the scale retailers had bargained on.

Total value of sales excluding fuel rose 2.8 per cent in June, compared with the same month a year before. But this came in below May’s 3.7 per cent rise, and the retail sector’s hopes that the Jubilee would get shoppers spending once more.
Despite an apparent perfect storm of a double-dip recession and torrential rain, a number of retailers are refusing to let tough trading conditions affect their sales. In sharp contrast to JJB Sport’s latest results, Sports Direct, Britain’s biggest sports retailer, managed to boost annual sales by 17.3%, with online sales up 82 per cent. 

While JJB blamed poor sales of Euro 2012 football shirts on its 8.7 per cent dip in half year sales to 15 July, Sports Direct chief executive Dave Forsey told shareholders that its own trading since April was “in line with management expectations” as strong retail sales continued to fund investment in margins.

Similarly John Lewis, a retailer known for its tempestuous relationship with the weather, on Friday reported its third double-digit growth in weekly sales in row.

Instead of keeping shoppers away, it appears the rainfall kept them in store, as John Lewis’ Summer Clearance boosted ‘retail therapy’ purchases. The department store group said the surge was led by a 37 per cent rise in electricals and home technology, with online sales rising a whopping 51 per cent.

British Retail Consortium director general, Stephen Robertson, said: "The wettest June on record posed a major challenge for retailers. These figures confirm our own showing that there was only a mild-boost from the Jubilee but it did stop June being significantly worse. Our results show people splashed out during the few sunny days ahead of the long weekend but the extra bank holiday made little difference.

"The extent of the rain in recent months has largely drowned demand for summer goods. Retailers with unsold shorts, sandals or garden furniture are now pinning their hopes on a decent late spell of sunshine to clear space for autumn ranges.
"The good news for hard-pressed customers is; inflation is sharply down over the last three months. Severe discounting is cutting clothing and footwear prices and supermarkets are passing on falls in global commodity costs – offering hope of a revival in consumer spending power."

Whether a summer of Olympic Games and festivities can save the fate of retailers on the brink remains to be seen, but it’s clear that the fight for survival on both the high street and online is not over yet.