Abstract
The Christmas trading period is when the strength of a retailer' s proposition and business performance is tested to the utmost, and 2007 was no exception. There was pressure on consumer spending, partly due to the squeeze on credit and a gloomy outlook for the economy. This contributed to worse than expected trading conditions in December 2007, and by the middle of February 2008 the casualty list reads:
- Three fatalities - Dolcis (footwear) entered administration in the middle of January, Stead & Simpson (footwear) entered administration at the end of January, and The Works (books and stationery) entered administration in early February.
- Three seriously wounded - in the form of profit warnings from JJB Sports, DSGi and Land of Leather.
Given the extent of the slowdown in retail sales growth in December, things could have been worse if the slowdown had begun to bite earlier. The impact of weaker trading at Christmas will be long lasting, as this is such an important part of the trading year. The cost of clearing unsold goods in the Sales could impair year-end results.
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