Nervy third period prelude to critical Christmas quarter

The bira third quarter sales monitor portrays a continued struggle for high street sales, with downward pressure on prices and upward pressure on costs. In comparison to the second quarter results there has been a slight moderation in the net figures away from bad news. Even in really difficult conditions we see 44% of independents reporting better figures averaging 8%, but 56% reported a downturn averaging 10% year-on-year.

It is surprising, and pleasing, to see that Furniture, Floor Coverings, Beds and Soft Furnishings, which saw the biggest falls in the depths of the recession, recording their third straight quarter of growth. As this area involves some fairly big-ticket items this is a welcome sign under current testing circumstances. At the same time Clothing and Footwear racked up their third consecutive quarter of year-on-year pain. Interestingly though, that sector marked the bottom of the group at -4.6%, whereas each preceding quarter had seen some product areas dropping by close to 10%.

The story told by our new question about cost price inflation is enlightening: 48% of respondents reported input price inflation above 7%, well clear of CPI and RPI. The story is very clear: independents are being squeezed.

The question is how this will continue to play out in the critically important Christmas period. With Christmas comes not just a make-or-break selling period but, for many, a quarter day as well. As the 60% of members who describe their feelings about the year ahead as "anxious" understand only too well, these are worrying times. The 40% who are reasonably or very confident (an impressive figure) will continue to smile and sally forth.

The two page summary of results can be found here: bira_sales_monitor_2011_Q3.pdf

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