Retail News

Friday January 8th 2010

Retail crime surges during recession.

The number of thefts from shops rose by a third in a single year with an incident occurring nearly every minute, 24 hours a day - while incidents of violence and abuse against shop staff doubled.

The findings are revealed in the British Retail Consortium's (BRC's) Retail Crime Survey 2009.

For the first time the BRC survey has assessed the proportion of retail crimes that are not reported to the police. Data from retailers indicates two thirds of customer thefts are not reported; suggesting the actual number of shoplifting incidents was over one million.

Experian FootFall data reveals December year-on-year decline of 2.8 per cent.


Data shows change in VAT rate led to increase in shoppers searching for last minute bargains online

December’s footfall result for December 2009 compared with December 2008 revealed a decline of 2.8%. Regionally, the areas worst affected by the snow had the worst performance, with the hardest hit region being the North East showing a 10.78% decline, followed by Scotland which showed a year-on-year drop of 9.15% and the East Midlands with a 8.23% decline.

Experian FootFall: regional breakdown

Regional Index Eastern -0.05 %
Regional Index East Midlands -8.23 %
Regional Index London -4.28 %
Regional Index North East -10.78%
Regional Index North West -4.36 %
Regional Index Scotland -9.15 %
Regional Index South East -2.06 %
Regional Index South West and Wales 6.53 %
Regional Index West Midlands -3.91 %
Regional Index Yorkshire-Humber -6.20 %

Anita Manan, senior analyst for Experian Footfall comments: The days of a traditional slow and steady pace of growth in shopper numbers to the high street have been replaced with wise, shrewd and confident consumers, who buy at the best prices online before hitting the high streets at a time when retailers start their promotional activity. However this year, consumers who played the waiting game and held back until the last few days to Christmas may have been disappointed or frustrated that the weather somewhat jeopardised their strategy.

As the final week of Christmas commenced, shoppers who were unable to travel in the treacherous conditions were left no choice but to postpone shopping or go online and hope that the delivery would not be disrupted by the weather.

Jonathan de Mello, director of retail and property, Experian comments: December was a mixed picture for retailers, with some, such as John Lewis and Next, performing very well, and others such as D2 and La Senza clearly struggling. With footfall as a whole down overall for December however, when set against a poor Christmas 2008, it is clear that December was disappointing for the majority of retailers. John Lewis is an outlier in many respects, benefiting from the southern bias of its stores (as footfall suffered most in Scotland and northern England, which was worst hit by the weather) and the fact that John Lewis stores act as destinations in their own right, with their own car parking and everything under one roof, sheltered from the elements.

The phenomenal levels of footfall on Boxing Day and the days immediately after won't make up entirely for the under-performance seen in the first three weeks up to Christmas Eve. Plus this footfall came at a cost as retailers were offering substantially discounted product (albeit less than last year), which will have impacted their profit margins. This reluctance on the part of consumers to shop in the run up to Christmas was due in part to the bad weather, but also an increasingly price conscious, discount driven UK shopper.

“Retailers are significantly more resilient than this time last year, however, and had planned for an anticipated poor Christmas by cutting down on excess stock, squeezing their suppliers and reducing store overheads and staff costs. Additionally, they have also benefited from the relative appreciation of sterling vs December 2008. It is those retailers that haven't had the bargaining power or economies of scale to do this that will struggle most due to the poor December we have had, i.e. the UK's dwindling collection of independent retailers. Though we are unlikely to see any further multiple retailers entering administration/CVA in the near future - as many multiples have now negotiated monthly rental deals - the same is not true for independent retailers, as many haven't had the bargaining power to negotiate such deals.”

Shop price inflation rose in December

Overall shop price inflation up 2.2% in December.

Food inflation increased to 3.7% in December from 2.8% in November. Non-food inflation was up 1.4% in December from -1.2% in November.


Stephen Robertson, British Retail Consortium Director General, said: "With December being the first and only month where the 15 per cent VAT rate was the same as a year earlier, a shop price inflation rise was unavoidable. The downward effect of the VAT cut on annual inflation ended as its first anniversary passed but December's 2.2 per cent is still below the sort of figures we saw in the second half of 2008 before VAT became a factor.

"With retailers telling the BRC weak consumer demand is their biggest concern for 2010, they are doing all they can to hold prices down and avoid passing higher costs on to customers but shop price inflation is bound to be higher in January because of the return of the higher VAT rate.

"VAT isn't the only issue though. Increases in the costs of oil, food commodities such as wheat and sugar and the continued weakness of the pound are also filtering through."

Mike Watkins, Senior Manager, Retailer Services, Nielsen added: "Prices fell in December 2008 as the result of the VAT reduction and, at the height of the shopper recession, discounting in non-food was also significant. There is also some food price inflation due to currency changes affecting ambient foods which are feeding through to volatile shop prices in supermarkets. So against these comparatives, the increase in shop prices this December is no surprise."