A retailer’s worst nightmare - where are the customers?

December 2010 will go down as one of the worst on record for many high street / shopping centre retailers (and some online retailers too). This short video helps explain the problem. The experience of poor weather, coupled with the threat of further disruption has led many customers to simply abandon their traditional shopping binge. Remember that many retailers depend on the crucial Christmas period for the majority of their profits, since running a retail store involves significant fixed costs.

Could the external environment for retailers get any worse? Weather disruption has ruined a seasonally strong sales period. The impending rise in VAT to 20% in Jan 2011 will discourage customers, as will rising unemployment and low wage and salary growth. Add to that the continued depression in the UK housing market. Who would be a retailer?