Sales are on the up, but consumers remain cautious. - ABa Mystery Customer Services

Sales are on the up, but consumers remain cautious.

14th June 2010

A recent survey has revealed that UK retail sales are on the up, but consumer confidence is still uneven when it comes to high value purchases.

Last week the British Retail Consortium (BRC) released figures showing a 0.8pp rise in the value of sales compared to last year, on a like-for-like basis. The recent arrival of warmer weather pushed up sales of clothing, outdoor DIY and gardening, while the World Cup has helped increase television sales - although this has been significantly aided by heavy discounts and promotions.

Following a less than savoury April, food sales have regained momentum. Joanne Denney-Finch, CEO of food & grocery experts IGD said, "IGD research shows that 27% of shoppers change their meal plans on fine weekends, so a combination of hot weather and a long run for England in the World Cup should be good news for both shoppers and retailers."

However, there is a flip side to this recent growth. While consumer confidence has clearly strengthened over the last 12 months, there is still uncertainty surrounding the purchase of more expensive goods. While forecasts suggest we are leaving the recession safely in 2009, there is still uncertainty over job prospects and continued income, both of which impacted upon the spending power of the people. Added to this the recent public spending cuts and potential tax rises, understandably consumers will remain wary of where they spend their cash - next week's emergency budget from Chancellor George Osborne should help provide more clarity.

As the retail industry begins to see light at the end of the tunnel, with sales rising and stronger consumer spending, those taking a multi-facetted approach to performance improvement are going to be the overall winners. While revenue is a key driver throughout the industry, for continued growth companies should be factoring in the needs of the customers as well as the stakeholders. Retailers putting their customers at the heart of their business, building strong long lasting relationships (relationships that will survive economic downturn), will be the retailers that come out the other end with increased customer retention, a stronger brand presence and inevitably higher sales figures.

British Retail Consortium