Speaking at the World Retail Congress in Barcelona, Sir Philip told delegates that the retail market had turned ‘ugly... as tough as I’ve seen it’, as he warned that profits were likely to tumble again at high street stalwart Bhs – and that’s after an eye-watering 55% drop last year. It’s at times like these when it must help to be married to the biggest shareholder.
Green said Bhs has had a ‘horrible’ few weeks, as the impact of the credit crunch has been exacerbated by the early Easter and the unseasonal snow – although he told the FT that the major problem has been increasing costs, not slow sales. And he thinks there’s plenty more pain to come, predicting ‘slow pain’ for the whole sector. ‘This isn’t like a jabs, it’s like continual jabs’, said Green. Sounds like a night out with Pete Doherty – maybe Kate Moss helped him out with this analogy?
Still, as Green was quick to point out, nobody’s safe from the smack-down on the high street – not even Waitrose, which seemed to have been bucking the general trend in recent months. The supermarket chain said today that sales fell more than 10% last week, possibly because everyone’s taking their Easter holidays at a different time this year. After all, there’s no need to stock up on the organic tofu when you’re popping off to Val d’Isere for the week.
The early Easter has also taken a big bite out of Cadbury’s revenues. The confectionery said today that a shorter sale period for its chocolate eggs and heavy discounting from rivals had done some serious damage to its UK sales growth. Fortunately for Cadbury (given that it’s about to spin off its drinks arm), people are still stuffing their faces with sweets outside the UK – global confectionery sales were up 7%.
And before we all get too gloomy, we should point out that Green did sound a note of optimism in Barcelona (where he was being inducted into the Retail Hall of Fame, apparently). He reckons the shakeout will see the very best retailers rise to the top, and told the Times that he still expected fashion chain Topshop to have a record year.
Since Topshop alone is thought to make profits of more than £100m a year, he’s not exactly likely to be short of a few quid this year. What price another pop at an ailing M&S...?