15th January 2007

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Consumers will be watching the pennies after the Bank of England’s recent interest rate hike – bad news for high street retailers says UU retail expert Donald McFetridge.

But there will always be winners and losers in the retail world and this year it’s the supermarkets coming out on top, says Donald. 

“The supermarkets will continue to have an excellent year in 2007,” says Donald, “their Christmas and New Year trading figures proved to be excellent, with strong growth in the non-food sector helping them enormously. 

“The indigenous retail sector, especially Musgrave, which includes Super-Valu and Centra, will continue to grow at an exponential rate, especially when they launch their new look in the spring of 2007. 

“But we still need more prestige brand retailers such as the John Lewis Partnership and House of Fraser to prevent further leakage from the island of Ireland due to the easy availability of low cost flights and travel. 

“Many in the drapery sector such as Primark, New Look and the Spanish chain Zara will also continue to trade successfully and competitively as will the more prestige drapery retailers like Gucci and Prada. There will, therefore, be greater polarisation in the drapery sector as this trend continues.   

“Meanwhile, retailers such as Next will struggle a little at the beginning of the year until they roll-out their new store format since Marks & Spencer is now starting to catch them up.  This area of the market will see fierce competition in terms of price, quality, range of merchandise and more aggressive advertising and promotion. 

“The book trade will continue to experience difficulties with the major chains competing for market share. With more people using multi-media resources, the supermarkets offering discounted books and online purchasing increasing, it is all having a noticeable effect on the trade. 

“The '3 for 2' promotions may also be increased, for example with ‘free book' offers, as one way of trying to capture new customer interest.  This area of the retail trade will be one where strong competition is going to be cut throat and extremely evident. 

“Overall, it is going to continue to be a very competitive market out there in 2007 and there will be many opportunities for prudent consumers to realise good price savings if they are careful in their choice and learn how to shop around and compare prices, especially online. 

“Online purchasing will, of course, continue to be a most important factor in the retail sector in 2007 with 24-hour shopping in many stores such as Top Shop, Marks & Spencers, Next and the supermarkets remaining a very important part of their store portfolio.” 

For further information, please contact:

Trina Porter
Telephone: 028 71675511
Email: Trina Porter