UK retailers paint a bleak picture of Christmas trading

UK retailers are feeling pessimistic in the traditionally peak pre-Christmas trading period, with only 15 per cent of retailers anticipating that they will have a better Christmas in 2010 compared to 2009, according to research by Cybertill, a supplier of cloud-based retail software to independent and high street retailers.

Cybertill polled its 600 retail customers in a variety of sectors including fashion, bicycles, sports, discount, footwear, department stores, charity, off licences and more, and 41 per cent said they expect sales to be down this Christmas, while 37 per cent expected roughly the same levels of trading.

When asked about their outlook for 2011, only one in four was confident. The reasons for this lack of confidence included government spending cuts, and poor consumer confidence following recent economic troubles in the eurozone countries.

The retailers that did feel confident cited a number of reasons for their positive outlook. Although a resonating theme was the emphasis on service, as Kevin Grant of independent bike retailer Escape Route, based in Pitlochry, commented: “We are trying to look at ways to retain and develop our customer base. One of our strengths is our face-to-face customer service, offering sound and impartial advice to customers, this is critical in retaining customers.”

Another reason for the optimism appears to be the social media, as high-end home interiors retailer, Graham and Green, believes social media commerce will help them grow in 2011.

Darek Szuminski, IT manager at Graham and Green, said: “We are planning to increase our presence in social media, as we see this as a major opportunity for driving growth in 2011.” Regarding the 2011 VAT rise (of 2.5 per cent from 17.5 per cent to 20 per cent) retailers are split, with 50 per cent of retailers planning to pass the VAT rise onto customers. Thirty seven per cent said that they will absorb the cost, while 13 per cent remain undecided.

Twenty five per cent of retailers surveyed also stated that the government announcement regarding the austerity cuts had affected their business and of those affected 33 per cent had seen a reduction of 10 per cent or more in takings. However, 58 per cent of retailers surveyed said that they have not yet been affected by the impending cuts.

Ian Tomlinson, executive chairman of Cybertill, said: “The high street is facing testing times at the moment, due to the uncertain economic climate, as this research demonstrates.”