Toy stores one of the hardest hit in downturn

The British Shops and Stores Association has announced the latest set of results from its quarterly sales monitor.
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The bssa report shows that toy stores fared particularly badly in the last quarter along with books and music stores, all down 7.5 per cent. Only cards, crafts, stationery and hobby stores benefited from an increase.

There was also clear evidence that independent retailers are suffering from the downturn to a greater degree than multiples, with three month like-for-like sales down 1.83 per cent compared with a BRC figure of down 0.03% for the same quarter this year.

With the exception of Scotland, only London and the southeast showed positive sales performance in the last quarter. The survey also reveals that following a positive performance by department stores in Q1, performance has dipped to -5.5 per cent in the last quarter.

“It is of great concern that overall performance year to date is adverse by -1.7 per cent compared with last year,” commented bssa Chief Executive, John Dean. “Superimpose above inflation increases in overheads and one can see the pressures many independent retailers face.”

When comparing performance with the same quarter last year, 58 per cent reported a drop at an average of -12.2 per cent. It was the same story when it came to performance for the financial year to date, compared with the same point in 2007 with 55 per cent of all respondents reported a lower performance with the same average decrease.

John Dean concludes: “Comments from respondents indicate that independent retailers are trying to counteract the effects of the downturn with deeper sales cuts impacting on margin. Store owners report that currency fluctuations are making trade difficult and unpredictable and that they are worried that increases in rents, wages, competition and ‘red tape’ encourages preparations for closure. These results indicate the serious predicament independent retailers currently face. Despite the dangers of increasing inflation, there is a strong argument to drop bank rate to stimulate the economy in the short term.”

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