The high street challenge – and opportunity

Official data have confirmed that 2012 was a bleak Christmas for retailers. Seasonally-adjusted figures from the Office for National Statistics (ONS) show that the amount spent on retail goods in December was 0.1% lower than in November and only 0.7% higher than December 2011. This was significantly less than the 2.7% inflation figure recorded by the consumer prices index. Online retail figures were more positive: ONS figures show that online transactions account for 10.6% of total shop sales. That’s up from 2.7% in January 2007.

However, it is too simplistic to conclude that the rise of online shopping means pain throughout the high street. According to Neil Saunders, MD of retail consultancy Conlumino, the retailers that are succeeding “are taking advantage of online, but they are really moving that into making the stores a success… or they are focusing on value and they are offering something that is really difficult to get online.” Christine Cross, chief retail and consumer adviser to PwC, says the companies that will be winners “need to adapt to all elements of the new normal: economic conditions; the need to stimulate customers to spend through innovation; convenience in channel to market; and service.”