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Retailers facing ‘more volatile’ trading patterns

It has become harder for retailers to anticipate future trading patterns, a Deloitte expert has warned.

Friday 19 December 2014

Retailers are finding it more difficult to predict when their peak trading periods will fall, in light of events such as Black Friday, according to an expert from Deloitte.

New research from the Office for National Statistics (ONS) shows that retail firms benefited from their strongest sales improvement in 11 months during November.

Between October and November, sales volumes improved by 1.6%, with a wide range of deals on offer ahead of the busy festive period.

The ONS said the year-on-year growth rate was even stronger, hitting 6.4%. This represents the best reading since May 2004.

‘Strong numbers’

Ian Geddes, UK head of retail at business advisory firm Deloitte, said retailers benefited from “very strong numbers” last month.

Despite the improvement, Mr Geddes highlighted that Black Friday fell in November this year, while it occurred in December in both 2012 and 2013.

He said: “The extent to which sales have been promotionally driven is highlighted by the steepest decline in store prices for 12 years.”

Volatile trading patterns

Among its other findings, the ONS said average store prices fell by 2% in November, in annual terms. August 2002 marked the last time such a pronounced dip was recorded.

For the first time since December 2013, all types of stores achieved growth last month.

But Mr Geddes said trading patterns have become more volatile, meaning some retailers may struggle to predict when peak periods of demand will occur.

He continued: “Dealing with this peak demand is one of the biggest challenges faced by retailers today.

“During this key trading period, having the right stock and the right level of staffing, along with resilient and stable platforms in place to serve consumer demand, is critical and can ultimately define success or failure for the entire year.”

Finding the right balance

The commentator concluded that retailers are only likely to have a successful Christmas this time around if they have achieved the right balance.

Those who fail to get this right will have to rethink their approach at the start of the New Year, he said.

Black Friday saw high street and online retailers dramatically reduce their prices on a number of items, in a bid to kick-start the Christmas shopping period.

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Copyright Press Association 2014

“During this key trading period, having the right stock and the right level of staffing, along with resilient and stable platforms in place to serve consumer demand, is critical and can ultimately define success or failure for the entire year.”


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