January Retail Round-Up

Posted by Momentum Instore on 19 January 2018

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Retail news this month has been dominated by two things – Christmas trading results and predictions for the year ahead.

So, unless you’ve been hibernating, laid up with the dreaded flu or spending the winter in far sunnier climes, then you will know that the retail picture has been a very mixed one this year but is there a silver lining on the horizon? Here’s our summary of this months’ headlines.

Was Christmas a boom or bust?

It’s always a make or break time for retailers and this year’s trading results identified a split down the line between food and non-food with Tesco, Sainsbury's, Morrisons and Waitrose reporting healthy sales increases over Christmas, although this was partly due to inflation. The convenience sector fared well too with Sainsbury’s Local seeing an 8.2% surge in sales.

There were some non-food winners too, mainly in clothing, with Next, Joules, Boohoo and Fat Face all reporting like-for-like sales increases. Some retail analysts are putting this down to the pre-Christmas cold snap experienced by most of the UK.

Discounting in the run up to Christmas, or more importantly the decision whether to discount or not, didn’t always have the desired result. Debenhams went down the discounting route although it didn’t pay off and sales of seasonal gifts and clothing fell so much that it issued a profits warning. A profits warning also came from Mothercare after their like-for-like sales fell by 7.2% following its decision not to discount in the run-up to Christmas.

Conversely, clothing retailer Fat Face claimed that it’s decision not to discount was crucial to its success after it revealed a healthy 12% increase in total sales in December.

Marks and Spencer didn’t fare well for either food or non-food with clothing and homewares down 2.8% and food sales down 0.4%.

Theguardian.com ‘The UK Christmas retail winners and losers’ – 11 January 2018

The retail casualties of 2017

Sadly, there were a number of retail casualties in 2017. In fact, the number of retailers that went into administration rose for the first time in five years .

Wholesales Palmer and Harvey collapsed towards the end of the year, as did furniture retailers Feather & Black and Multiyork. And fashion chain Store Twenty One went in to liquidation.

There were also a few well-known names that were just about clinging on at the beginning of the year and the future is now uncertain for the likes of House of Fraser, Debenhams and New Look. Toys R Us also narrowly avoided administration at the end of 2017.

What will 2018 bring to retailing?

Retail experts and analysts are always keen to make their predictions for a new year and, this year, there seems to be some agreement. There is a significant amount of disruption in retail and with the rise of online and mobile shopping, technology lies at the heart of this disruption .

According to Forbes, bricks and mortar retailers live and die by their customer experience and so they will have to take a risk and start transforming what they offer. This means using technology to their advantage to enhance the in-store experience their customers get.

Retail design will also play a big part in successful retailing in 2018, with predictions from some experts that the place to shop will increasingly be a place to socialise, eat and work . Mindfulness and wellness will also be important in retail design and retailers must experiment with design in order to engage with their customers on many different levels.

Telegraph.co.uk ‘Retail casualties rise for first time in five years’ - 8 January 2018
Forbes.com ‘Retail in 2018 will be about technology for technology’s sake’ 11 January 2018
Designweek.co.uk ‘Design in 2018 – what will retail design look like’ 9 January 2018

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