I was recently re-reading articles on the UK Home Improvement retail arena that I contributed for in 2006. While I can see that my grasp of the English language has not improved what is also evident is that the external stimuli (or lack of) that impact trends in the area have not changed a jot. The housing market (the prices of houses and the number of transactions) and the great (sic) British weather were core themes back in 2006, they still are today. In our industry we cannot avoid the weather it helps it hinders it’s never predictable. Likewise the correlation between the boom of the housing market in the 90s / 00s coincided with the boom in Home and Living retailing and since the 2007 housing market crash the retail arena has continued to struggle to return to positivity.
It’s raining it’s pouring we’re not spending
As rivulets of rain course there way down the window of my 8.06 train winding its way through south west London suburbs into Waterloo and with a bleak weather forecast for the weekend ahead (gale force winds with the rain – only in September in the UK) I can already state with absolute certainty that sales of BBQs, garden furniture, lawnmowers, plant fertilizers, hosepipes and a myriad of other garden products will be poor.
So garden centres, home improvement stores and their like will not record anywhere near the levels of seasonal sales seen as recently as two weeks ago when the decent August bank holiday weather saw excellent returns. Is this a surprise to anyone? I truly hope not, yet across the months of March to September specialist and non-specialist UK retailers place a huge part of their success in the hands of the weather gods. So when sales success of these products are directly impacted by what happens above, who would want to retail with such uncontrollable dynamics in play?
Well clearly there is still a desire for retailers to make this sector a success and despite the fact that the Home and Living market did contract in 2011, in terms of retail space, with the loss of Focus DIY we are seeing more and newer retailers entering this sector. Yes supermarkets continue to expand their seasonal ranges but we are now also seeing the new price focussed discount retail chains and pound chains add to the competitive landscape. There is clearly still margin to be had!
So how do the specialists continue to thrive/survive with these factors in play? Well every cloud has a silver lining; it’s raining again, that’s okay we’ll go for coffee and cake as our local garden centre has infinitely better coffee than our high street chain. It’s raining again that’s okay we’ll go and get those curtains for the kids bedroom we’ve been meaning to get all summer! My point, however tenuous, is that our traditional home and lifestyle retailers, while they are being impacted by our weather, have always found ways to get us to part with our hard earned. Yes the weather has meant a ridiculously tough 2012 and start to 2013 for garden centres. The coffee point I make is based on a conversation with centre staff recently where their café was cited as keeping their head above water (sorry) during 2012. Their coffee and cake is that good that despite this weather they are still a retail destination. Home improvement retailers have begun to sublet space to retailers from their competitive set i.e. the grocers; we get their year round footfall and they are paying our rent – genius!
The Housing Market in Growth!
So while it doesn’t come to me as a great surprise when reading the financial RSS feeds that the weather “aids turnover” / “restricts turnover” I am also not surprised that the media have already trumpeted the return of the British Housing market while at the same time balancing expectations by cautioning against the “debt-fuelled bubble” that is being warned against. If this second point is managed by the UK government and their support continues for first time buyers then we maybe about to enter a period of stability and who knows, growth for the Home and Lifestyle retail sector.