Retailers are feeling the pain of what Quiz today described as an “exceptionally challenging” retail market, while Ted Baker pointed to “difficult and unpredictable trading” as it reported falling retail sales – primarily in stores – and warned that full-year profits may be held back.
Supporting evidence for the two retailers view of the economic environment came as analysis suggested that visitors to stores were at their lowest level for six years, according to BRC/Springboard figures out this week. Ongoing political uncertainty – around exactly what Brexit is going to mean – continues to dominate. There are interesting insights from Quiz in its full-year report, where it becomes clear that it had too much stock for the eventual level of sales, and had to sell at a discount, with resulting impacts on profitability. That retailer’s focus is now firmly on profitability, and it is moving away from third-party sales that are less profitable for it. It’s also going to focus on keeping its existing customers – through measures including the QVIP scheme – rather than on spending to win new ones. The rethink of retail continues.
Despite the wider gloom, it’s good to see innovation continuing, nonetheless. Ocado is investing in vertical farms businesses in order to ensure that it can get fresh produce to its customers, fast. Eventually, it says, it hopes to be growing leafy greens and herbs close to its fulfilment centres, including those that give one-hour delivery. The distance from farm to plate could soon be shorter than ever. And from our European coverage, we report on how bol.com is using click and collect points in Delhaize supermarkets, and so gaining a store presence for an online brand.
Today’s guest comment is a timely one. It comes from Simon Hall of 5XThinking, who looks at how companies are testing the power of artificial intelligence to optimise prices at a time when customers are increasingly cautious about spending.