Pro Content

UK Market: Consumers Hesitant Over High Ticket Numbers

What a difference constipation can make!

WOW – how things can change and how rapidly they can change. Consumer confidence is low, much lower than anticipated. Reduced discretionary spending, coupled with a desire for immediate gratification purchases (dining out), together with an appetite for ‘revenge travel’, does not leave a lot in the wallet for our beloved boardsports.
By Gordon Way

Who can blame consumers for being cautious? Inflation, and food inflation particularly, is still high – although inflation is easing a little. Energy prices and prices at the pump are also falling back, but the shift is really slow, and it still means that prices are still higher than ‘normal’ – whatever normal is? Confidence is low. Priorities are shifting. At the same time, interest rates remain high and today (22 June) hit a 15 year high leading to increased mortgage misery – another massive dent in the wallet. Far be it from me to advise the Chancellor, but… interest rate increases are apparently a good way to combat inflation when an economy is overheating. Given that the current round of inflation (primarily food and energy) is surely a fallout from Putin’s illegal war (F Putin), and the economy appears to be a long way from overheating … is hiking interest rates helping anyone?

OK – edging into politics is not a good idea, and we really do not have enough words to get into that.

The positive winter season did not follow through with a good start to the traditional summer business. Chris from Snowfit, “Winter was great. It was only in the last 2-3 weeks of the season that it slowed. If it had continued, we would probably have had a record year. It may be our fault that the end petered out a bit because we did not go on sale, so that may account for the lack of end-of-season turnover.” And how has spring been? “Slow start, but now the sun has come out, it’s ticking along. We’re being very proactive and working hard to create sales and get people in-store. The nice thing is that when they do come in, there is very little, if any, price discussion. They’re paying the prices. Margin is being maintained. On SUP, we’re finding people buying better product – they bought their crappy fist SUP from Aldi and now want something better.”

Chris’s summer business is a bonus and is the smaller part of the business compared to winter sports. As such, they are not overstocked and not suffering like many watersports shops.

For most, the supply chain is suffering from severe ‘stock constipation’ with currently no good laxative in sight by way of footfall.

Where are the customers? Where is the weather? I thought it would be a good idea to check back in with Matt from H2O, who for the last missive was previously pretty positive – was he feeling the same way? “Still optimistic. But you have to be an optimist in this business; otherwise, you’d go mad.” He’s right, of course. “Following January and February, we felt that early Spring would be up 30-35%, but it was not to be. It started OK, but then felt like we were going backwards. Weather was cold. Even on sunny days, there was a bitter wind. I reckon that we are at least 5-6 weeks behind the season – and maybe more.” Recently? Has it been any better? Do you think that the lost ground can be made up? “No. When it’s gone, it’s gone! May was tough and well down on last year. If we’re lucky, June may be on par with last year, but it’s so inconsistent – great for 3 or 4 days and then nothing for 3 or 4 days. It’s so sporadic” [Late June]

Matt repeated a comment we have heard from other retailers: “Sub £100 spend is plentiful – people are still getting a fix by making a smaller purchase. Larger purchases are also about – you have to work harder to land them, but they are around if you go and find them. It’s the middle ground that is seriously missing, and footfall is down. Last weekend, we had a demo on the harbour, and I reckon there were about 50% of the numbers I would have expected to see on the water. And the schools? They’ve not really started yet.”

John Ball from ‘247 Watersports’ (online only) came into the office, so I had a chat to see how things were faring for them. “I had a great feeling – seeing how the winter sports market had been and how it had ended. I thought this would follow through to a flying start for water sports. How wrong could I be? February and March were virtually nothing, April was crap, and May… I’ve never had a time like it – so quiet.”

So not the best start to the conversation, but John is very pragmatic. “It is what it is. We have cut our cloth accordingly. June has started and is looking to be decent but will not be anywhere near last year. We’re having to fight for every deal and… discounting… discounting… don’t get me started. As well as now competing with other retailers (fair game), we’re now finding that we sometimes have to match prices from our suppliers who are selling D2C at the price that I bought the stuff for. Incredible! Do they expect pre-orders for next year? Having to compete and match discounted suppliers selling direct really pisses me off.”

And looking forward? “I think that this could be our worst year in terms of turnover since we started 15 years ago, but it’s so weather-dependent – give us a great summer, and we could surprise ourselves. We’ll get through it – we always do. Having cut our cloth accordingly, if the sales do come through, then we should be in for a very profitable year! And believe me we have the stock!”

Sadly, one retailer who has not got through is ‘Sail & Ski’, Chester. The family business has been going for more than 50 years, but finally, Dave decided to call it a day and appointed Administrators. With half a century behind them, you will appreciate that their roots were in bricks & mortar. The shop was strongly regarded as part of the fabric of Chester. It is never easy when a retailer goes out of business, but it is all the more painful when a family business closes down, especially one that has been around for so long. I would like to wish Dave all the best for the future and thank him and his family for the business and the fun times. Really, truly sad to see them go.

As for the laxative, it’s not straightforward. We need a dose of warm, windy, sunny weather mixed in with some good waves. We need reduced inflation. We need Putin to fall off a cliff (F Putin). Sadly all out of our control. Situation normal, me thinks. Pass the toilet roll.