MATT JOHNSON is chairman of Mando Group
FOR those standing patiently in the long and winding queues through Liverpool’s HMV store last Saturday, news that shares in the group slumped 20% last week after a warning over continuing losses, seems at odds with the evidence of their own eyes.
It can surely never be said that the Liverpool One store is not doing its bit to bolster the bottom line.
Yet, the music, video, games and book retailer made a pre-tax loss of £41.3m in the six months to October 23, compared with a £24.9m loss last year. Like-for-like sales fell by 16.1%.
These are challenging times for the retail sector. For many, trading in the next 10 days stands to make or break whole businesses, as well as individual reputations.
HMV is not alone in the struggle to return to profitability, but it faces stiff competition – in particular from online retailers who have established large and loyal customer bases. Waterstone’s, another of our high street stalwarts, is also part of the HMV Group. Here, sales are down 3.2% in the period under review.
Against that backdrop, the retail sector has another double whammy to contend with.
Sales were seriously depleted by the recent bad weather (and there may be more to come between now and Christmas) and in the New Year UK VAT rise. Snow disruption has even prompted some retailers to consider opening for 24 hours at a time on designated days between now and Christmas Eve.
And, as ever, there will be those trading through Christmas Day itself and hundreds more outlets preparing to start sales on Boxing Day. Figures like those posted by HMV underline the difficulties the sector is facing. The British Retail Consortium (BRC) says a combination of the bad weather and continuing economic nervousness could hit retail sales hard this Christmas. Its figures show sales grew by 0.7% in November from the same month the previous year, compared with growth of 0.8% the previous month.
According to the BRC, total sales growth has been weak now for eight months in a row.
Yet, despite the gloom and snow and ice, last weekend alone £2.5bn was spent nationwide with the John Lewis chain taking £121m in sales in the week to last Saturday.
What price those figures rising next weekend?
