The approach of the Christmas season has everybody, commentators and potential customers alike, again focussing on retailers and what they have to offer. Retailers for their part are absolutely focussed on making sales. It’s that one opportunity in the year when retailers hopefully can make some money from customers who are “trained to spend” at Christmas. Conversely, property people are ready to relax: over the next week or so more property people will be on the golf course focussing on the next shot, with the expectation that 2012 will be a better year than 2011. The same property people will also be hoping that retailers will have a good Christmas so that they can pay their bills and move more confidently into the New Year. It’s a vicious circle, and as time has demonstrated both parties need each other to succeed.
So will retailers have a good retail trading period? Will this Christmas be the lifeline that is needed to give everybody a bit more confidence? Will 2012 be a good year for us all?
First up, we expect to see the same old comments on TV. It seems that the news media have difficulty in injecting any new stories into the festive season. The cameras will be out and about in shopping centres and retail stores and the interviews will be similar to last year and the year before, and commentators will have the same old approach, using material on consumer spend that supposedly sets the scene for a retail prediction one way or the other. Simply put, we expect this Christmas to generate some decent spend for retailers based on the simple theory that it is time to spend in consumers’ minds. Confidence therefore will return, and 2012 will be a better year for all. Hang on – what about the international credit crisis? Europe is in turmoil and the world economy could collapse. Well it could, but it won’t, and this time next year we will be addressing similar issues to those of this year. What about employment? What about it, the same people employed this year will be employed next year, and those that don’t want to be employed won’t be. That’s a pretty severe statement! No it’s not and it’s reality. Effectively, we all work hard in hard times and reap the rewards when the economy gets better. It’s that simple. Nothing changes!
However we have noticed a couple of changes in the last week, which some of you may have missed. Borders bookshops has effectively closed and been taken into the Whitcoulls stable. So the group is no longer around. Is that a pity? We think so. In our view competition and individual brands have an impact on consumers; they feel better about the ability to shop in different environments. We are not sure that Whitcoulls has changed since the Pascoe Group takeover and we will watch this with interest into 2012. For that matter, despite the level of publicity, we are still not sure that Paper Plus has got their in-store presentation right yet either. Certainly the customer will still be confused. So the book industry is still very much at risk. Why? Well the level of online shopping that is going on, particularly offshore, is gaining significant momentum. It’s inevitable that the Government will look at this level of potential trading in the New Year, and what the pros and cons are. Frankly this is a difficult area to police, and just how the book retailers are going to compete long term will be of concern. “Value” and adaptability will be the key issues that will need to be addressed by both Whitcoulls and Paper Plus in the New Year, with some urgency.
We were in Napier this last week. The new Mitre 10 and The Warehouse stores that have opened recently in the new “Park” development, appropriately named as it was the former “Nelson Park” site, are worthy of a visit. The Warehouse still promotes its “Extra” brand and without being cynical as to why, given that the store offers no more merchandise than other stores in the group, the external image is interesting and attractive. Internally, we remain a little pessimistic as to what they are trying to achieve, and we would be cautious as to the customer reaction. The Mitre 10 store meanwhile is certainly a very substantial offering and would compete very effectively with any other similar store in the country. Certainly this store in any location would give Bunnings a run for their money, and the partnership Mitre 10 now have with Columbus Coffee will certainly attract the female shopper.
Finally, for the female shopper, the fact that the Sussan brand is to be lost to New Zealand shoppers has probably gone unnoticed. The CEO of Sussan made this announcement to its New Zealand customers, advising that six stores will close and nine will be rebranded to the “Suzanne Grae” brand. This will increase the number of Suzanne Grae stores across the country to twenty. Will the brand be missed? We doubt it. However it does beg the question as to why brands come and go as they do. Companies put a lot of effort into branding and to close a chain or rebrand is a risk for all concerned. It is, however, what we have all come to expect. Nothing stays the same, just Christmas!
SHAREWATCH – BRISCOE GROUP
Last month, Briscoe Group announced their third quarter sales, for the three months to October. The group, which includes Briscoes and Rebel Sport stores across New Zealand, increased sales by 9.15% compared with the same period in 2010.
This is a pretty significant improvement, especially considering that the group has closed a number of Living and Giving stores this year. “Same store” sales were up 13.56%. Nearly all the gain was due to Rebel Sport, which had a sales bonanza during the Rugby World Cup.
For the “year to date”, i.e. the nine months to October, Briscoe Group’s sales were up 4.35%, most of this coming from Rebel Sport. Profits for the full year are expected to be higher than last year, although the key Christmas period will determine just how much higher.
IN THE PRESS
LOCAL AND INTERNATIONAL MEDIA HIGHLIGHTS 28 – 5 DECEMBER 2011
Google Maps indoor territory
Google’s next frontier in digital mapping will span the world’s airports and shopping malls.
(Source: NZ Herald)
Air NZ introduces Airpoints debit card option
Air New Zealand says new additions to its Airpoints loyalty cards could revolutionise the travel industry by giving its users the ability to load several overseas currency “wallets” up with cash, send money to other cardholders by text and buy goods from foreign websites.
(Source: NZ Herald)
City supermarket moves forward
Foodstuffs up and coming New World Metro supermarket, below the BNZ Centre at 125 Queen St, opening in the city’s CBD in March, is said to be a smaller-format store with limited space where fresh produce will be a dominant feature.
(Source: NZ Herald)
Shopping Channel aims for July
Greg Partington, managing director and part-owner of Ogilvy advertising is in confirmed negotiations with Television New Zealand to take a long-term lease of channel TVNZ7, which is being discontinued. Based on United States channels like the Home Shopping Network, the shopping channel could be up and running late July.
(Source: NZ Herald)
