(1 December to 16 December 2016) THE HEADLINES

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Retail-Excellence-Christmas-Trading-Statement-2016

RETAIL EXCELLENCE CHRISTMAS TRADING STATEMENT PART 1

(1 st December to 16 th December 2016)

THE HEADLINES

Calling It – Current trading in the Irish Retail industry remains very mixed and in some retail

sectors hugely volatile. Some sectors are reporting marginal gains but the majority of retail

sectors are experiencing like for like declines. It is anticipated that Christmas 2016 will trade

down against Christmas 2015.

Sentiment – It is clear that Trump and Brexit have created great uncertainty which in turn has

delivered significant erosion in consumer sentiment. With spending down across the country

it would seem that the Irish consumer is unsure of what the future holds and in turn have in

recent weeks tightened their wallets.

Weather – With the weather having been so mild in recent weeks we expected footfall to be

up against last year, when we suffered intense rain and floods. That has been the case with

urban centres reporting footfall increases while in shopping centres footfall has been flat at

best. That said any increase in footfall has not translated into increased spending.

Black Friday – Love it or loath it, it would seem that Black Friday has eaten into full margin

demand in the weeks before and after it. The savvy Irish shopper has become accustomed to

shopping for discount.

Currency Crisis – November witnessed a significant increase in co.uk activity as sterling was

weak over the month. Some logistics companies are reporting a 30% to 80% increases in the

number of parcels being delivered from the UK into Ireland. Sterling rebounding in recent

weeks and some price inflation in the UK market has resulted in reduced shopping in the UK.

A Big Week – The week ahead is significantly important with much shopping activity to be

completed especially for low ticket gifts, self gifting, food and fashion. Many thousands of

emigrants will also arrive home soon and will have some shopping to do. With two Saturdays

to go there is still a lot at stake.

Geographic Divide – There would seem to be an acceleration in the divide between the

fortunes of Eastern located retailers versus their Western counterparts. Retail sales data from

Western located businesses is far weaker than those in the east of the country.


CONSUMER ELECTRONICS

The consumer electronics sector is performing poorly. Whilst most operators enjoyed like for

like gains over the Black Friday weekend, this simply ate into full margin sales in the weeks

prior and after it. A significant proportion of demand migrated to co.uk websites in

November especially for brown goods. White goods including dishwashers and washing

machines are performing reasonably well due to standard replacement demand and some

fluidity returning to the housing market. Small appliances are also performing reasonably with

coffee makers and food processors being the flavour of the day. That said brown goods have

witnessed significant sales declines against this time last year and overall this sector is trading

down.

PREDICTED LIKE FOR LIKE SALES DECEMBER 2016 VERSUS DECEMBER

2015 – DOWN

TELECOMMUNICATIONS

Like previous years the fortunes of the telecommunications sector has mirrored those of the

consumer electronics sector, with telecommunications also trading down. The sector enjoyed

a robust Black Friday, albeit margin was lost and the event also delivered a number of slow

weeks in the run up as consumers postponed any spending until the arrival of the big

discount day. Since then like for like sales have being tracking back with the only silver lining

being sales of iPhone7 and Samsung handsets which have proved very popular. As in

previous years, constraints on supply might lead to some models selling out in the coming

week. While the post pay market is flat, the pre pay market is experiencing significant

declines. Overall this sector has performed sluggishly and sales against last year are most

definitely down.

PREDICTED LIKE FOR LIKE SALES DECEMBER 2016 VERSUS DECEMBER

2015 – DOWN

BEAUTY & PHARMACY

This sector is experiencing very mixed trading with a minority of stores reporting some

modest growth while the majority are tracking backwards. Fragrance and cosmetics can be a

last minute small ticket stocking filler, thus there is a lot to play for next week. Seasonal

fragrance gift-sets and premium cosmetics are all trading down. The Irish consumer has lost

interest in celebrity fragrance lines which are not selling through. Overall this sector is over

stocked and trading down. Many of the pharmacy groups have gone into pre-Christmas sale,

a measure never seen before.

PREDICTED LIKE FOR LIKE SALES DECEMBER 2016 VERSUS DECEMBER

2015 – DOWN


GROCERY & ALCOHOL

Grocery sales have been reasonably robust in recent weeks, however while trading is tracking

slightly ahead of last year, margin is most definitely down. Intense competition has led to

accelerated promotional activity with market share being fought hard for and margin being

sacrificed. While border located stores have noticed slight declines, the fact that Irish grocery

is well priced, particularly in alcohol, the leakage up north has not been as aggressive this

time around. Premium operators are reporting reasonably strong sales with a significant

cohort of Irish consumers respecting and responding to food provenance.

PREDICTED LIKE FOR LIKE SALES DECEMBER 2016 VERSUS DECEMBER

2015 – PARITY

LADIESWEAR

The ladieswear sector is currently demonstrating extreme volatility. While overall the sector is

trading down, there are a small number of stores reporting marginal like for like gains. It is

noticeable that the stores demonstrating growth are those who have placed emphasis on

social media. These stores report that social media is now a key factor and a large volume of

sales are generated by Facebook posts and snapchat blogs. November was a tough month

with customers visibly waiting on Black Friday. Some in this sector made a conscious decision

not to participate in Black Friday and feel it is important to maintain established sales period

for their loyal customer base. Some stores reported that trade dropped off 2/3 weeks before

Black Friday as people knew the discounts were coming. There is significant nervousness in

the sector with many national operators entering into pre-Christmas sales this week. Overall

ladieswear is trading down.

PREDICTED LIKE FOR LIKE SALES DECEMBER 2016 VERSUS DECEMBER

2015 – DOWN

FOOTWEAR

Overall the Footwear sector is trading down on this time last year. There is good footfall out

at the weekends but it is a challenge to translate this into sales. As in other areas of retail,

online is becoming a key challenge in the footwear sector with many stores who provide an

online service reporting a marginal upward trend. Some stores report that the brakes were

put on in the run up to Black Friday and although many reported good trading on the day,

the sector has been very quiet since then. Some stores have made a conscious decision to

stay away from participating in Black Friday instead choosing to go into sale in line with

standard sales periods. Overall this sector is trading down against this time last year.

PREDICTED LIKE FOR LIKE SALES DECEMBER 2016 VERSUS DECEMBER

2015 – DOWN


STATIONARY | TOYS | MUSIC

The sector reported that trading started two weeks later than usual this year. The sector is

trading down with many suggesting that Black Friday is damaging trade and contributing to

the late start to shopping. The general consensuses is that although trading on Black Friday

was marginally up year on year, the lead in was very weak with the Saturday and Sunday after

Black Friday being reported to be a tap being turned off. In general footfall is up but spend

is down with many shoppers opting to buy online outside of the country. Overall this sector is

trading down.

PREDICTED LIKE FOR LIKE SALES DECEMBER 2016 VERSUS DECEMBER

2015 – DOWN

CAFÉ/FOOD TO GO

This sector is always an indicator of people being out and about and this year is no different.

Overall footfall is up with a lift starting around Black Friday weekend and this translated to an

uplift in sales for the start of the trading period although consumer spend is more reserved

than expected. Next week is a key time for this sector as online becomes less relevant and

people get out and about to shop. Overall this sector is trading up.

PREDICTED LIKE FOR LIKE SALES DECEMBER 2016 VERSUS DECEMBER

2015 – UP

GIFT & HOMEWARE

Trading started a little earlier than usual driven by Black Friday. There was a consumer

expectation around the weekend so many in the sector embraced it and moved traditional

seasonal offers forward to capitalise. Sales were pulled forward into this period which has set

the scene for a challenging December. Overall December trading to date is flat with some

hope of a late surge. Overall this sector is trading on a par with last year.

PREDICTED LIKE FOR LIKE SALES DECEMBER 2016 VERSUS DECEMBER

2015 – PARITY

MENSWEAR

After a soft quarter three period for Menswear, the sector has begun to bounce back. There

has been a sheer divide in the level of bounce back, with county towns performing very

strongly with a strong ‘shop local’ mentality whereas the cities and shopping centres have

been slower to bounce back due to the high density of competition. The mild weather

conditions have certainly not helped matters in selling seasonal clothing and this has

contributed to the sluggish sales. The older demographic continue to be one of the best

performing cohorts in this category and with many younger male emigrants yet to come


home for Christmas, they will provide a needed boost in sales as they ‘shop local’. Overall this

sector is trading up, just about.

PREDICTED LIKE FOR LIKE SALES DECEMBER 2016 VERSUS DECEMBER

2015 – UP

JEWELLERY

The Jewellery sector is experiencing a tough Christmas trading period so far with sales being

considerably down on last year. The lack of new and fashionable branded products this

Christmas has severely dampened trading for the Jewellery sector. Footfall has been weak as

a result. Black Friday was very strong and it continued over the weekend also. With Christmas

falling on a Sunday, there is still a long lead in to go, which leave plenty of time for the male

consumer to venture. Indications are that December overall will be like for like down.

PREDICTED LIKE FOR LIKE SALES DECEMBER 2016 VERSUS DECEMBER

2015 – DOWN

GARDEN

The sector enjoyed good footfall with steady to positive sales earlier in November and

December with key categories such plants and hanging baskets noting a surge, helped by the

clement weather. Most garden centres are hopeful with the long lead in to Christmas that

sales will pick up next week. Artificial trees continue to underperform with some pre-

Christmas sales happening in other product categories to drive activity. Small ticket

homewares and decorations have held up well, however a key issue for this sector is the

growth in illegal and non-Revenue registered Christmas tree sellers. Overall this sector is

trading on a par with last year.

PREDICTED LIKE FOR LIKE SALES DECEMBER 2016 VERSUS DECEMBER

2015 – PARITY

HEALTH STORES

This sector in the main appears to be trading on par, if not slightly better than last year. Some

took part in Black Friday with positive sales figures online and those who did directly

participate reported additional footfall over the period however, this did not necessarily

translate into increase sales. It was noted that some stores near the border have suffered and

are down slightly but overall a steady November and December so far with the hope of a lastminute

surge next week in the final trading days before Christmas. Overall this sector is

trading on par with last year.


PREDICTED LIKE FOR LIKE SALES DECEMBER 2016 VERSUS DECEMBER

2015 – PARITY

ONLINE

This sector has performed strongly over the past month with Black Friday proving very

successful overall. It appeared to be a Cyber week rather than a weekend with multiple

retailers offering week long discounts. A noticeable change on 2015 was that retailers were

most definitely more prepared. Product specific offerings rather than flat rates across the

board was a common strategy adapted. Retailers promoted offers effectively across multiple

platforms including TV, email, social media, newsletters and AdWords campaigns. Online

deliveries have seen up to a 30% increase in certain areas across Ireland. Black Friday was

busier than Cyber Monday for the majority of retailers with most still reporting positive online

activity which is up on 2015 figures. Overall this sector is trading up on last year.

PREDICTED LIKE FOR LIKE SALES DECEMBER 2016 VERSUS DECEMBER

2015 – UP

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