Recession polarising retail sector

THE RECESSION is accelerating the gap between weak and strong retailers and the fortunes of different sectors, according to accountancy firm Ernst & Young.

The Christmas trading period was not universally grim, said the firm, because some retailers – such as food, value and niche players – prospered while “big ticket” stores selling electrical goods and furniture underperformed.

Retail director Jason Gordon, said: “Overall, Christmas was weak but not the total disaster that some commentators were predicting. However, retailers operating in different sectors suffered or enjoyed vastly different fortunes.” 
 
“The recession is accelerating the gap between the weaker and stronger players and between the performance of different sectors, as consumers trade down to value products and delay major home-related purchases.”

Christmas 2008 also saw deeper discounting than ever before but according to Mr Gordon the winners bought less stock and took decisive action, often by going on sale earlier.

He said food and value-focused retailers will continue to prove resilient to the downturn and the failure of some businesses in the worst hit sectors will allow survivors to increase their market share.