In the past few weeks, UK Retailers have started to issue trading updates for the first time since last Christmas. Many have them not been as gloomy as we might expect given what is at best a fragile economic recovery. However, the most recent results from the most relevant trio of monthly surveys have certainly highlighted the weak state of consumer confidence which has been hammered by job security worries, high petrol prices and low wages growth

1. British Retail Consortium UK Retail Sales (relating to February 2012) – total sales growth year on year of 2.3% was below consumer price inflation of 3.6%. Therefore total sales growth was well below inflation meaning that customers were actually buying less than this time last year whilst discounts continue to eat into margins
2. ONS Retail Sales (relating to February 2012) – sales values fell by 0.4% between January and February 2012
3. CBI Distributive Trades Survey (relating to March 2012) – relatively speaking this was the most optimistic of the three surveys by at least suggesting that sales had stabilised given recent falls

In addition to these gloomy reviews, John Lewis has got off to a slow start with only a quarter of its stores showing positive like for like sales growth in the 8 weeks to 24 March 2012. John Lewis is always seen as a bell-wether as far as UK Retail is concerned. The less said about Game Group the better although there looks to be a half-happy outcome

Conversely, a number of the recent FTSE-listed Retailer trading updates have tended to defy the gloom and have been relatively upbeat in tone. Examples have been those issued by the likes of J Sainsbury and Next. There does appear to be a link between some of these updates if we look at just two extracts (my emphases):

NEXT

“During the year we continued the rapid growth of our online business both in the UK and overseas through NEXT Directory, which now accounts for 32% of group sales and 44% of operating profits. We believe that part of this success is due to our NEXT Retail store network and the ability of the two businesses to work together and support each other”

J SAINSBURY

“Convenience, online and non-food are all growing ahead of the market, as our multi-channel offer means customers can do more of their shopping with Sainsbury's”

Developing integrated, consistent and complementary sales channels to market has correctly been identified by many Retailers as the way to grab market share from rivals and counter consumer unwillingness to spend. Revealingly, John Lewis’ like for like sales increase for the eight weeks to 24 March were 8.6% for the entire Group, but JohnLewis.com’s equivalent sales increase was 39.4%. Real food for thought here as Retailers look to develop winning strategies in straitened times.