Upturn in sales a relief for local retailers – PwC

RETAIL experts at accountancy firm PwC in Birmingham have welcomed the modest upturn in sales over the Christmas trading period.

They suggest it has brought relief for retailers in the West Midlands, many of which had been hoping that their stock and margin control strategies would prove effective.

British Retail Consortium (BRC) figures showed that like-for-like sales rose 0.3% in December. While this is only a small increase, PwC suggests that some retailers may have been expecting worse and there will be some considerable relief that all the careful planning that took place through last year has largely worked.

Andy Lyon, partner and retail expert at PwC in the Midlands, said: “The overall feeling is that Christmas and New Year trading has been as expected, with no surprises, and for many retailers this will have come as a relief.

“Having adjusted to the ‘new normal’ in terms of consumer demand and their likes and dislikes, most retailers know what they have to do to optimise profitability at this time of year and Christmas lines have sold well.”

While trading updates are largely as expected, with some winners and losers, online sales have been a massive success story this Christmas – online retail sales were up 17.8% in December, according to the BRC’s figures.

Lyon added: “High Street retailers have homed in on the online trading opportunity and this has paid off in a big way this Christmas. Most now operate ‘click and collect’ services, or something similar, and marketing and promotional activity is increasingly integrated across channels.

“The tactical use of mobile phone apps to draw in consumers and drive sales is also helping to make the High Street a more dynamic and engaging sales environment.

“Despite this, demand for High Street space is shrinking and in the year ahead retailers will need to adapt further to take account of the shift in consumer-buying behaviour.

“As leases lapse in 2013, more property is likely to fall vacant and this could lead to more pop-ups and encourage take up of other short-term lease arrangements.

“Shopping areas without anchor stores may need to undergo significant redevelopment in order to survive.”