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EDITORIAL Shoe Zone, THG and Very on trading in time of economic uncertainty

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Today’s InternetRetailing newsletter comes as analysis shows more retailers are issuing profit warnings in the light of low consumer confidence and rising costs that are holding back sales and threaten profitability. But those that offer value, sell across channels or can cut online costs are benefiting at the bottom line as shoppers move back to more normal patterns of spending in the wake of the Covid-19 pandemic lockdowns.

The currently low level of consumer confidence is reflected in a high number of profits warnings from consumer-facing business – especially retail, according to new analysis from EY-Parthenon. Supply chain issues and rising costs are also part of the reason for a generally high level of warnings that is at its highest since 2008. 

It’s against that continuing background of low shopper confidence that retail is now looking to incoming Prime Minister Rishi Sunak for certainty. The BRC also wants to see action taken on business rates. 

Some retailers and brands are better placed than others simply by virtue of the categories they trade. THG reports today that demand for the beauty, health and wellness products that its brands from Lookfantastic to Myprotein sell remains consistent despite ongoing cost-of-living challenges. 

And value footwear retailer Shoe Zone says its sales continue to be robust in the face of economic uncertainty. It also says it is seeing its online and in-store sales settle into a more normal pattern post-Covid-19. 

Very Group has seen its sales fall in a year in which shoppers returned to more normal patterns in shopping in the wake of the Covid-19 pandemic – following a shift online last year that gave Very record results. 

Today we also report as Frasers Group outlines its brand investment strategy as it boosts its stake in Hugo Boss and takes a 5.1% stake in Asos. 

In today’s guest comment Adam Castleton of Startle considers why stores matter to online retailers

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