Sales - Quarterbridge

Hope you had a good Christmas. Try not to think about the kipper season.

Preliminary sales results from the big boys have been poor at best. The ‘Big Four’ supermarkets have been fighting off the Germans – Aldi and Lidl – so margins remained wafer-thin. The high street fashion retailers were hammered by unseasonably warm weather and Black Friday never really took off. Biggies like H&M and Next started their sales early (which is a bit worrying given the low rate of inflation and rising disposable incomes). Drastic discounting did not draw in the crowds as expected so when the full Christmas sales results are announced it will be interesting to see the proportion which transferred to online or simply disappeared to online competition. Amazon and Google announced amazing turnover figures for Black Friday with durables, white goods and presents only a click away. Shoppers were still seen browsing High Street shops up to Christmas Eve but more for price-comparison with online and/or to sniff out last-minute bargains. Conversion to sales seems to have been poor with many shoppers preferring to sit in front of their PC with a pile of mince pies.

Lower High Street footfall means lower Market turnover

You might have hoped this would not affect your market but I’m sorry to say that doesn’t appear to be the case. Stallholders do not have the sky-high rents and rates of a ‘bricks ‘n mortar’ high street retailer so are still able to offer real bargains BUT they remain overwhelmingly reliant on footfall. Lower high street footfall means lower market turnover which seems to have affected seasonal Christmas markets as much as weekday general markets. Meat, poultry and fruit & veg. seems to have stood up reasonably well but European traders who came to the UK in search of a strong currency and better sales turnover went home disappointed. Sales turnover on Christmas markets seems to have fallen by at least a quarter.

Those with a decent online presence have definitely held their ground

So who were the real winners? Those with a decent online presence have definitely held their ground. Those selling craft and luxury goods only have done well. My friend trained as saddlemaker in Walsall but threw in that towel to make wallets, belts, dog collars and handbags and only sells online. His sales through Etsy, Ebay, Facebook and website are better then ever. He’s not cheap but works on the theory that no girl can ever be too thin or own too many handbags or pairs of shoes. He took a big gamble and doubled his stock from July but had a cracking good Christmas since. His secrets are low overheads, adding value by product skills and selling online 24/7.

Thank heavens the markets industry is so innovative and resilient

So where does this leave the markets industry? The impact of online retailing and home delivery by DHL is as profound as the introduction of self-service supermarkets was to the corner shop. Thank heavens the markets industry is so innovative and resilient. Sadly, the Chancelllor’s Autumn statement didn’t contain any real goodies for small businesses to reinvest in and develop themselves. But it did confirm your market authority’s worst fears – a further 29% in spending cuts over the next 5 years. The easy cuts have been made already so you can anticipate services like care for the elderly taking priority. Loss-making ‘discretionary’ services like markets are in line for disposal in line with the ‘Big Society’ agenda promoted by David Cameron.

It would be interesting to know how many stallholders have half-embraced online retailing

It would be interesting to know how many Stallholders have HALF-embraced online retailing, but not the right half. Be honest with yourself and admit whether you’ve gone online because you’re too busy selling and don’t have time to sit in the carpark queue at Bluewater (6 hours) or Silverburn (3 hours). Maybe next year you should plan ahead and go online then treat yourself with a post-Christmas weekend holiday in Eastern Europe. Many of their Christmas markets stay open until the Orthodox Christmas on 6th January.

A Christmas when you don’t have to work – whoopee!

So how are the January sales for you? Lots of Shoppers seem to be voting with their feet and deserting the High Street in favour of online sales. ‘Why suffer cold and wet feet traipsing in search of bargains when you can stay at home and do it online?’ was the thinking behind another Government-supported attempt to revive our emptying High Streets. First there was the DCLG-sponsored ‘Portas review’, then the ‘Town Team’ competition and the private ‘Grimsey Review’ and now it’s the turn of the ‘Distressed Town Centre Property Taskforce’ sponsored by the HM Treasury. You can download it from http://policy.bcsc.org.uk/beyondretail/index.asp

Some Councils like Birkenhead and Rochdale are promoting their High Street Markets as ‘retail differentiators’.

It covers the usual big issues – lack of funding, online sales, fragmented land ownership and parking policy etc and outlines interesting initiatives such as the ‘retail business incubators’ in Wolverhampton and Tamworth. Also how Rotherham provides revenue and capital support for fledgling businesses. Some Councils like Birkenhead and Rochdale are promoting their High Street Markets as ‘retail differentiators’ and there’s a good argument to be had about why this hasn’t happened before. But like the reviews before it this one offers little else but local policy support for SME’s (‘Small and Medium-sized Enterprises’). There’s a nice piccy of Stockport Market Hall and some welcome discussion of ‘provision of mentoring and…social media for independent retailers and small businesses’ but I can’t help thinking the review is still missing the blindingly obvious.

SME’s are less deterred by the cost of rent and rates than the administrative burden of paperwork they encounter as they expand. If HM Treasury is serious about encouraging SME’s as ‘the engine room of the economy’ then it needs to take a long-term approach to relaxing Vat rules, tax thresholds, NI and employment legislation which apply to small businesses. Those costs are outside the control of any independent retailer and a very real disincentive to growth. You can always negotiate your rent downwards with a landlord but just you wait and see what happens when you miss your Vat return. Didn’t David Osborne promise a ‘bonfire of paperwork’ in one of his budget speeches? That’s the way to cure SME’s cold feet.

The Independent Parliamentary Standards Authority created to set MP’s pay and expenses in the aftermath of the expenses scandal proposes to increase MP’s salaries by 11% to £74,000 p.a.in 2015.

Someone else has definitely got cold feet – MP’s. The Independent Parliamentary Standards Authority created to set MP’s pay and expenses in the aftermath of the expenses scandal proposes to increase MP’s salaries by 11% to £74,000 p.a.in 2015, despite objections by all parliamentary leaders. The best bit is that MP’s have no way of stopping the increase unless they change the law they introduced a couple of years ago. Labour has said ‘any rise in MPs’ pay must be considered in the light of…the cost-of-living crisis facing people across the country’ and the Prime Minister has threatened to abolish IPSA if it force-feeds MP’s with another eight thou. per annum. He didn’t mention anything about HS2 though. Great stuff. I wonder how many will vote in the abolition debate.

Scientists conclude the ‘regulars’ who turn up first always secure the best pitches in the middle.

And finally, some not-so-cold cold feet: German Scientists have discovered how Penguins manage to keep their feet (and the baby Penguins which sit upon them) nice and cosy during a blizzard. A similar problem is shared by many Traders on Open Markets. Apparently the Penguins bunch together and shuffle around in a sort of Mexican wave whilst squawking about the weather and how few fish there are, or whatever. This keeps the ones in the middle toasty warm whilst they struggle not to get shuffled out to the edge. With cold Teutonic logic the scientists conclude the ‘regulars’ who turn up first always secure the best pitches in the middle whilst the ‘casuals’ who can’t be arsed are left with the coldest pitches at the edge. This sounds very familiar and I can’t work out why scientists needed to go to Antarctica to confirm it.

So leave your moonboots at home and train a pair of Penguins to sit on your feet. Or if the Toby objects, then seize the business opportunity and start manufacturing Penguin-lookalike boots.

Keep shuffling. Spring is not that far away.