Better than expected retailer trading statements in first
quarter of 2009
- Slight rise in proportion of retailers reporting total sales
increases compared to the previous quarter
- Number of negative trading statements down from last quarter
The proportion of negative trading statements issued by
retailers listed on the London Stock Exchange during the first
quarter of 2009 has not exhibited the expected further rate of
retail decline that some analysts had predicted. This is according
to a review issued by leading business and financial advisers Grant
Thornton.
The Grant Thornton Quoted Retail Companies Index* for Q1 2009
found that 25% of retailers posted negative trading updates during
this period which is only marginally up from 23% in the same
trading period last year. More encouraging is the fact that this
performance is slightly better than the last quarter of 2008 when
27% of retailers reported negative trading statements.
However, the number of positive statements has dropped to 27% in
Q1 2009, a ten per cent decrease from the same period last
year.
David Bush, Head of Grant Thornton's Retail Services Team, says:
"The retail market is showing some signs of resilience in this
tough economic climate. These results are the first indication that
perhaps the decline in consumer confidence over the last eighteen
months has reached a turning point. These results are similar
or, in some cases, slightly better than Q4 2008. That quarter's
results included the all important Christmas results which were not
in any event as disastrous as many analysts were predicting."
Food and drink retailers continue to perform well despite the
economic downturn. Four out of five food retailers who posted
results in this trading period increased their sales in the last
quarter. These included Tesco, J Sainsbury, Wm Morrison and
Greggs.
"The better retailers are still standing having taken
appropriate cost cutting measures and product ranging decisions.
They have picked up market share from weaker competition which in
many cases have fallen into administration over the last few
months."
"There appears to be the first signs of some revival in the UK
housing market, if the increase in February in the number of new
mortgages granted month on month is to be believed. This
gives hope to retailers which specifically sell homeware and
household products."
"In this recession, there are consumers out there who do have
money to spend despite much comment to the contrary. These
shoppers may have tracker mortgages, could be in
secure jobs that are attracting pay rises despite zero
inflation or are younger and more affluent consumers who are not as
worried about losing their jobs and do not have dependents or
heavy financial commitments. The stronger retailers continue
to tap into these key consumer groups by displaying a strong
overall "offer" and product range", concludes Bush.
* Grant Thornton's Quoted Retail Companies Index is a review of
the quarterly trading statements issued between 1 January and 31
March 2009 by those General Retailers and Food & Drug retailers
listed on the London Stock Exchange.