The freezing Weather that swept across the UK from the Siberia – dubbed “the Beast from the East” – took quite a toll on the country’s Retail Sector. Sales declined 2.2 percent between February and March, affecting a range of sectors. Shoppers made 5 percent fewer trips to the grocery store, for example, costing supermarkets an estimated £22 million ($30 million) in lost sales. Department stores also suffered from lost sales. Debenhams reported that 2.2 percent decline in sales, half of which were blamed on the cold weather. Similarly, John Lewis reported sales that were 16 percent lower in mid-March 2018 than they were in 2017 because of frigid weather conditions.
Some argue that lackluster March sales are just another issue for a sector that faces mounting challenges. Drops in consumer confidence and macroeconomic factors, including inflation and stagnant wages, have meant consumers are being relatively cautious with their spending choices. This has put considerable downward pressure on sales in the first part of 2018.
However, some analysts are quick to point out that things aren’t quite as bad as they might seem. “What does today’s data tell us about the state of the industry and future prospects? Frankly, not a lot,” Ian Gilmartin, who is the head of retail and wholesale at Barclays corporate banking, told the Financial Times earlier this month, arguing that the statistics, while perhaps initially shocking, don’t actually indicate that catastrophe is on the horizon for the sector. “It’s simple — if people can’t get around, as shown by the drop in fuel sales, then they can’t go shopping, with lower footfall hitting the overall sales figures.”
Many are quick to point out that online shopping actually increased during the cold weather spurt, suggesting that just because consumers were unwilling to brave the freezing temperatures doesn’t necessarily mean that they were totally unwilling to spend. With the weather warming up and macroeconomic factors improving slightly, many contend that the British retail sector could actually see a renaissance this summer – though it is difficult to predict how things might play out.
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