OPINION: Behind the multiples’ spin, the market is still tough

Last weekend I spent some time discussing business with 10 local retailers from all parts of the UK. Their message was that sales are tough.  Probing further, they were saying that they were trading 10 per cent down year-on-year, on average.

What were they doing about this? They were out in the market looking for new ideas, things that would work for their shops. However, many accept that progress will take some time. One shopkeeper told me how she could see her customers counting out how much money they had to spend before coming into her shop. While this was depressing, she is looking for ways to get them spending more.

Yesterday, talking to wholesalers I heard them saying that sales were flat. While everyone in the public wants to talk up how well they are doing, they admit that many of their customers, the retailers, are struggling.

At the same time, across London, Tesco’s new UK head was busy talking up how his company is performing. Christmas sales will be the best ever, he said. “We are already significantly ahead of plan on things like decorations and trees”. But in reporting this the FT repeated analysis that suggested Tesco’s sales are being inflated by sending out £100m worth of extra discount vouchers.

Waitrose, part of the John Lewis partnership, weekly pumps out good news; their latest update showing sales are up by 8.0 per cent across the first 16 weeks of its financial year.

But Waitrose may be the exception. One major multiple that took on 100 extra staff for a flagship store in the south, has now laid off 99 of them and has constraints on overtime, a local retailer tells me. The big stores have to talk up how well they are doing; this underpins their dealings with suppliers and encourages shoppers. Behind the spin the market is tough.

It is important if your sales are down that you watch your costs and protect your margins. It is not a great place to be but you must remain positive. Be positive with your customers. Find your success stories. Keep your shop a happy place. Invest in the future if you have a good plan.