Jersey Retail Sales Figures Disappointing but not Surprising

The Retail Sales figures released this week confirm what we on the High Street already knew – that footfall in the town is down and that some product lines are faring better than others. By interrogating the data further, it’s possible to gain a better understanding of the context against which the figures are set.

To recap on the information released by the States of Jersey Statistics Unit, the seasonally adjusted total volume of retail sales in the first quarter of this year was nine percent down on the same period last year. It’s important to point out though, at this stage, that Quarter 1 2011 saw the highest growth we have experienced for many years and so the fall this year will have been magnified.

Perhaps more worrying is the fact that the volume of retail sales has fallen for the third consecutive quarter (on an annual basis) in the food sector, and the fourth consecutive drop in the non-food category. At the sharp end we don’t find these statistics at all surprising because our own customer research shows that consumers are showing caution about expenditure, probably driven by the general economic uncertainty and lack of confidence in the job sector. But it helps to look at the bigger picture, which shows a clear change in the behaviour of shoppers as more people migrate to online shopping, something that local retailers must respond to, either with their own online service or by being more inventive in providing good service and value for money.

Going back to the figures, it is illuminating to look at where people are spending their money. In the food sector, which includes supermarkets, convenience stores and other small food retailers, the first quarter of 2012 saw the value of total sales remaining flat (but if you take into account that part of the value will have increased because of the rise in GST, then value of sales may actually have fallen slightly).

The non-food sector, in which we at de Gruchy operate, comprises household goods (such as furniture, DIY and electrical goods); textiles , clothing and footwear and non-food specialist items (such as toys, newspapers, office supplies, chemists and pet supplies). Big ticket products such as furniture have been slow to sell whereas cook shop and home furnishing sales are holding up well. Recognising the trend for entertaining at home rather than dining out, we invested significantly in our cook shop at the beginning of the year and it’s that sort of sharp thinking that is needed to sustain retailers in these lean times.

Sales of fashion items have been affected by the unseasonal weather. Our buyers obviously bring in new lines to match the season but with such a wet start to spring people are holding back on buying new items. Conversely, beauty and cosmetic products are showing resilience and this is in line with the global trend known as “affordable luxury” which manifests itself in times of recession. People will treat themselves to an inexpensive item that will make them feel good about themselves without the associated guilt of having splashed out on an unnecessary luxury.

It’s helpful to look at the Jersey figures against the UK results which were released three weeks ago. Those figures (based on a slightly different basket of items and so direct comparisons are difficult) showed the worst monthly fall for fashion retailers for almost two years, with the wettest April since records began. The weather, the UK Budget and a general feeling of doom and gloom all contributed to the slump.

The local figures released this week are based on fairly robust research. They are taken from a sample survey of retail businesses (excluding motor trades) in which 80% of those contacted responded. The businesses that took part employ 50% of the total labour force in the retail sector, so it’s fair to say they are an accurate picture of what is really happening on the street. But the figures are, of necessity, a snapshot that is effectively three months behind the reality and retailers need to remain nimble and bold, investing in staff and infrastructure to make the sure the customer experience is as good as it can possibly be.

Pictured: John Marquis

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