Thursday, October 2nd, 2008
There is no doubt that the year ahead will be a challenging one. It may represent the worst trading conditions for over 20 years - although the market will still grow, albeit marginally, cost base inflation is likely to outstrip growth in the top line for many.
I see three key challenges for retailers. Those managing them effectively will emerge from this difficult time leaner and stronger. It’s all to play for!
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Thursday, October 2nd, 2008
Whilst on the face of it, high levels of discounting and promotional activity may appear attractive to consumers in the form of lower prices, the RTT believes that widespread use of it can create risks for retailers. First and foremost, it believes that erosion of a retailer’s brand is one of the biggest risks faced.
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Thursday, October 2nd, 2008
For the purposes of the white paper, the RTT considered a broad definition of the topic area including:
Traditionally, ‘end of season’ sales were the way in which retailers disposed of surplus stock at regular, pre-determined times during the trading year; primarily in January and at the end of the summer. These sale times were well known by consumers as part of the shopping calendar and people understood that outside these regular sale times they would pay full price. It seemed to be a system that worked well for many years and suited both retailers and consumers.
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Thursday, October 2nd, 2008
The RTT believes that the current levels of discounting and promotions in today’s financial climate are untenable long-term; unsustainable; and unhealthy for the retail sector.
The situation, the RTT warns, is now one of a self-perpetuating, vicious cycle, where margins for the retail industry as a whole - as well as those of their suppliers - are being negatively impacted.
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Tuesday, September 30th, 2008
Given the RTT’s belief that the current landscape of discounts and sales is untenable in the longer term, it discussed how it sees the situation developing. The RTT believes that retailers which use promotion and discounts more strategically, as opposed to tactically, will be more successful.
The group agreed that value will be the key pillar of retailers’ strategies going forward. To maintain and improve its prospects, a retailer’s focus must be on plans and actions which enhance stakeholder value. Price is only a part of the value equation; product, brand and the environment are equally important.
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