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Cold weather turns into pressure cooker for high street stores

Published:  23 March, 2018

High street retailers lost out significantly thanks to the recent bad weather new data has revealed, with a spike in online shopping placing more strain on already troubled bricks and mortar stores.

Weather warnings and profit warnings seem to have gone hand in hand in recent weeks, as consumers turn increasingly to online shopping rather than brace the cold.

According to IMRG Capgemini e-Retail Sales Index, the slew of extreme weather at the end of February, dubbed the Beast from the East, helped online retail sales for the month to soar by +13.1% compared to the previous year and +3.5% lift in sales compared to the previous week.

This continues 2018’s positive start to online sales, with overall year-on-year growth averaging 13.5% for the year-to-date and smartphone spending particularly strong (+38.5%).

This is against a backdrop of an increasingly tense high street environment, where a number of stalwarts are taking drastic measures to offset falling footfall.

The latest companies to report taking remedial measures include Carpetright and Moss Bros, which have both issued profit warnings, and Kingfisher-owned B&Q which has reported falling sales.

The past six months have also seen the near collapse of electronics store Maplin and Toys R Us, as slowing consumer spending, rising costs and the switch to buying online seriously impact some of the high street’s biggest retailers.

Further divergence between high street and online could also be on the cards for the UK.

Bhavesh Unadkat, consultant in retail customer engagement at Capgemini, drew attention to the falling performance of the US retail market, which has just reported its third consecutive month of falling sales.

“As the US market is often seen as ahead of the UK’s this could foreshadow a similar trend in the coming months. Fortunately for internet retailers, the US reported +1% online sales growth,” he said.