The results are in-the Christmas hype has calmed down and we are back to reality so let’s reflect upon the Kings and Queens of Retail 2014.
Was it as we expected, or were there some nasty surprises?
To start on a positive there were some really clear winners for this year, and credit to those who have come up trumps. The Fragrance Shop were smelling of roses after they enjoyed an 11.8% increase in total sales over Xmas, tipping their total turnover for the year to more than that previous-predominantly thanks to a new retail strategy focusing on customer service and needs and increasing their product portfolio.
Budget retailers were also celebrating after price conscious, savvy shoppers headed straight to their doors. Greggs reported a substantial increase in sales beating their profit expectations, and Lidl reported a 20% increase in sales over the Xmas week. Poundstretcher have to be crowned the King though after declaring their most successful Christmas to date having attracted an astounding 7 million strong footfall during this time. House of Fraser have also ended the year in a very strong position after having introducing their own house retail brands Linea and Biba which have flown off the shelves. Growth across all categories were achieved especially homeware and beauty. Next, Ikea, Maplin, Primark and SuperDry were also winners with increased annual sales.
Now onto the not so good, what happened to these retail brands? The first to go into administration in January was Bank. Although they had been in trouble before, unfortunately their outlook continues to look bleak unless they obtain interest from another buyer quickly. Forced to push products into the sale pre-Christmas, margins were slashed, making a significant loss for the brand. Thornton’s also issued a pre-Christmas profit warning having struggled with lower orders from supermarkets. Onto the grocers then, Morrison’s were the worst performing comparable with other major supermarkets -so much so it led to the demise of CE Philip Dalton. Sainsbury’s and Tesco also reported lower sales comparable with previous years during this time. Majestic Wine have been forced to slash prices in order to keep up with the supermarkets with shares continue to fall, and M&S and Debenhams just scraped through with some stronger lines carrying their weak ones.
So looking back at Retail 2014, what can everyone learn moving forward? With reference to the above it appears the main challenge to overcome is the understanding of shopper purchasing patterns. What is motivating them? Do retailers truly understand this, and indeed is this where it could fundamentally be going wrong? Value for money, and in store experiences definitely appear to be top of the consumer agenda-with the winners being those that satisfy these aspirations.
Operating in such a competitive and difficult environment, retailers will need more than ever to take a step back and review to do well in 2015.
Discover our retail innovation strategy here which is the start of the journey. Allow us to support you in finding out exactly what influences your customers purchasing patterns, providing fresh inspiration to your sales strategies and in store experiences.
Business Development Manager