Can retailers maintain the summer bounce?

By the UK’s standards, we’ve had an excellent summer. Although the weather is beginning to return to the default setting of gloom and drizzle, for a good couple of months we enjoyed record temperatures and glorious sunny days. The national feel-good factor was boosted by the sporting heroics of the likes of Andy Murray and Chris Froome, and the birth of the royal baby.

jonny bacon

The government has had plenty of reason for cheer too, with all the smiles and sunshine apparently translating into rising consumer confidence. According to figures out at the end of last month, British consumer confidence jumped in July to its highest level since early 2010. The survey by market research company GfK shows that consumers’ attitudes towards their finances and the general economic situation are the most upbeat they’ve been for years.

This has given the retail sector a much-needed boost, with footfall in July up 0.8 per cent on a year ago, according to figures by the British Retail Consortium (BRC) and research firm Springboard. This amounts to a second consecutive month of growth and the fourth month to record a rise since the beginning of the year. Meanwhile, the national town centre vacancy rate was 11.1 per cent in July 2013, down from April’s high of 11.9 per cent.

Of course, these figures hardly suggest the high street is in rude health – particularly when this summer’s heatwave played such an important factor in driving footfall. But combined with an upturn in national GDP growth, there are reasons to regard this as something of a mini-recovery for the retail sector.

Diane Wehrle of Springboard noted that “for the first time it seems that a longer term improvement in footfall trends might be emerging”. The BRC, meanwhile, praised the way that retailers had reacted to the unseasonably hot summer, stating they “responded well to the heatwave and accompanying demand for summer food, fashion and outdoor living items”.

The question is can retailers maintain this momentum as the weather turns chillier and the nights draw in? This partly depends on the speed with which retailers can continue to adapt to new technologies and shopping behaviours. A number of major retail brands have made much of their new focus on providing a true multichannel offer – with some apparently reaping early benefits. In addition, it will be interesting to see how once-great retailers like HMV and Jessops approach the future now they have been given a second chance with new investors.

During the lead-in to the crucial Christmas trading period, retailers must work hard to entice and encourage consumers whose confidence levels are rising – but only tentatively. That will involve building on the innovation and flexibility shown by many retail names this summer.

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