Snow sends a shiver through shops Sunday, Dec 12 2010

Snow sends a shiver through shops

By Andrea Felsted and Andrew Bolger

Published: December 10 2010 19:27 | Last updated: December 10 2010 19:27

Retailers face a nail-biting fortnight in the run-up to Christmas, amid continuing bad weather and impending austerity measures.

“The next two weeks are make or break,” said one senior executive.

Scotland has been in the grip of severe weather conditions, and some store groups fear that a return of snow and ice in other parts of the country could blight the crucial festive trading period.

“Where there has been snow it has affected footfall – there is no question about it,” said the executive.

Another said: “If it drags on . . . a lot of retailers will be seriously nervous.”

Richard Hyman, strategic retail adviser at Deloitte, the professional services group, added: “It’s a bit of a lottery. It all depends on the weather. If this weather carries on, more or less, I think it’s going to be really serious.”

John Lewis, the department store group, said sales rose 1.3 per cent compared with the year before in the week to December 4. In the preceding week, sales were up almost 9 per cent, and some retailers suggested this impact could be reflected elsewhere in the sector.

Waitrose’s sales rose 5 per cent in the week to December 4. They were up 10.6 per cent in the preceding week.

“There is nervousness around the economy and if you are a non-food retailer I think the snow is a real challenge because people have not come out,” said a third executive. “It’s a question of how much of [those sales] will come back.”

The Federation of Small Businesses in Scotland said retailers that relied on passing trade had been particularly badly hit, as had those in outlying areas that struggled to receive deliveries.

Andy Willox, the FSB’s Scottish policy convener, said: “Scotland’s business community, especially in the central belt, has taken a real hit over the past two weeks, and there’s the possibility of more trouble to come.”

Some high street spending has moved online during the bad weather. John Lewis said online sales rose almost 50 per cent year-on-year in the week to December 4.

But Neil Saunders, consulting director of Verdict, estimated that, for every £1 spent on the high street, only about 70p was spent on the internet. “It is a lot of impulse spending that is lost out on. It definitely depletes retail sales,” Mr Saunders said.

Tesco, Britain’s biggest supermarket group by market share, was upbeat on Christmas sales in spite of the weather and uncertainty about the economy. It predicted that lost sales would come back, and that consumer confidence was returning.

John Lewis said it had seen a surge in demand for heaters, wellington boots, children’s coats, gloves and scarves as well as duvets, mattress toppers, hot water bottle covers and electric blankets.

Jason Gordon, of the consultancy Booz & Co, believes the immediate period is crucial. “Retailers have been biting their nails for some time. I think the next seven days will be absolutely pivotal. Once somebody loses their nerve and goes [for significant discounting], there will be a whole stream of people who will have to follow in immediate succession,” he said.

However, PwC, the professional services group, found that retailers appeared to be holding their nerve on discounting.

Some 55 per cent of the 100 high street retailers it surveyed were holding sales or advertising promotions, compared with 60 per cent last year – in spite of an average discount of 39 per cent compared with 37 per cent last year.

Supermarkets are seeking to kick-start spending by stepping up promotions on groceries, according to PwC, with an average of nine of the 20 typical Christmas-related products it tracked appearing on promotion last weekend, compared with eight the weekend before.


Retailers see rise in smartphone shopping Sunday, Dec 5 2010 

Retailers see rise in smartphone shopping

By Jonathan Birchall in New York

Published: November 29 2010 19:50 | Last updated: November 29 2010 19:50

US shoppers equipped with smartphones have significantly increased the volume of both searches and sales made from mobile devices so far this holiday season, underlining the technology’s growing retail power.

Fiona Dias, head of strategy at GSI Commerce, which provides e-commerce services to retailers, said that a survey of a range of retailers showed that sales from mobile devices accounted for almost 3 per cent of their online sales on the Friday and Saturday after the US Thanksgiving holiday last Thursday, compared with “practically zero” last year.

“You are talking about a nine or 10 times increase in penetration … although there’s still a way to go,” she said.

Laura Conrad, president of Pricegrabber, a comparison shopping site owned by Experian, said it had seen a “significant spike” in recent days in the number of people using their mobile phones both for purchases and for research.

“There is more research than buying because people are not completely comfortable making purchases [via this medium] and a lot of retailers still do not have good applications for the mobile phone yet,” she said.

The Find, a search engine that also allows shoppers to compare prices, said roughly a quarter of the searches over the post-Thanksgiving weekend came from mobile devices, up from about 15 per cent a year ago. It said the total number of mobile searches was more than four and a half times greater than the volume seen a year ago.

Ebay, the e-commerce marketplace, also reported that mobile transactions using its PayPal and Bill Me Later payments services more than tripled during the post-Thanksgiving Friday sales, compared with the same day last year. Ebay saw an increase of 27 per cent in total payment transactions over last year’s Black Friday.

Ms Dias said that Rue La La, a luxury flash sales site owned by GSI commerce, had benefited from an unusual surge in mobile usage on the day of the Thanksgiving holiday itself, as its primarily young, female customers used their phones to pursue limited-time sales offers. Mobile devices accounted for 19 per cent of its revenues, up from just 2 per cent of sales a year ago and double the levels seen earlier in the month.

“If you are sitting on your grandma’s couch … then you are really just forced to buy through Rue La La’s mobile site,” she said.

About 28 per cent of US mobile phone subscribers have a smartphone, according to data from The Nielsen Company.

Meanwhile, US retailers on Monday launched a new wave of price cutting offers to mark “cyber-Monday”, the day that sees a surge in online buying from the office as people return to work after the holiday.