Anticipated to be the summer of sales in the UK due to the double mega events – the Diamond Jubilee Celebrations of the Queen and the Olympics, nothing went as projected. Retailers looking for increased footfall from eager buyers on the streets during these momentous occasions had to face disappointment. Everything from gloomy weather in initial months to dreadful market conditions worked against the hopes of the retailers, failing to lift the buying spirit of the consumers, with the impact of overall retail sales remaining weak. The downfall was clearly visible as the sales at fashion stores dropped 2.6 per cent and the sales at non-fashion retailers fell 1.5 per cent…
After a disappointing, much hyped Diamond Jubilee Celebration, the Olympics too closed with mixed reviews from the retailers. The influx of the games had little impact on consumer spending in London, which spent around $ 20 billion pounds in hosting the event, in hopes to boost business. As per British Retail Consortium (BRC), the total sales, including that of new stores, were up just two per cent compared with 2.5 per cent in the same period last year. The like-for-like retail sales rose just 0.1 per cent compared to the figures of July 2011, when the sales rose 0.6 per cent, the figures appeared to be even worst compared to the June sales where the overall growth was 1.4 per cent. Making it clear to the market that the Games may have proved to be a great source for casting off some of the everyday gloom, but it failed to change the fundamentals of the economy, that remains deprived.
Going against all the early expectations that the Olympics will raise retailers’ fortunes dramatically, shoppers deliberately avoided the capital for fear of crowds, which resultantly stayed quieter than predicted and did not even benefit due to the influx of tourists. In fact, the number of tourists also dwindled this year, making the footfall drop about 20 per cent from the last games. During the latter half of the event retailers were even forced to reduce the prices of their Olympic Games souvenirs and merchandise by up to 80 per cent in order to make sales, following the poor demand of the shoppers. Although the high street brands suffered the maximum it was not all dim and dark as certain shopping malls managed to remain fortunate thanks to giant screen showing of the Games, like Westfield Stratford City which was so busy it could only allow in Olympic ticket holders at one stage.
British fashion brands, including Alexander McQueen, Burberry, Christopher Kane, Jonathan Saunders, Erdem, Paul Smith, Victoria Beckham and Vivienne Westwood, were amongst the few designers who specially created collections for the event and managed to win hearts of those who could afford them. Where the mid-level retailers were concerned, while sports brands and retailers such as Adidas, Nike, Puma, Sports Direct, JD Sports and Halfords faired reasonably well, banking on their specialized athletic collections, one other segment that managed to get some business was the e-tail sites. Online retail outlets including those of Next, M&S and John Lewis enjoyed their best sales since Christmas, up 15.6 per cent compared with a year earlier, as shoppers took advantage of special promotions and opted to buy from the comfort of their own homes. Even websites which were especially created for Olympic sales like shoplondon2012.com and teamusashop.com faired good and other retailers later were improving their websites and marketing strategies to keep up with the changing demand of consumers and resorted to discounting and promotions in order to stimulate them.
Many retail experts feel that the main reason behind the drop in sales during the Olympics is the changing consumer attitude. Before 2008, consumers were generally avaricious and extremely active, which helped the retailers to rope in more sales through events that occurred globally. But, that attitude has now disappeared and consumers today are much more selective about what they buy, making it hard for the retailers to bank upon the sales from special event, unlike in the past.
