The Analysis News & Opinions
Opinion
Poor Christmas retail results as spending slows
When the annual round of Christmas trading results came in from the high-street retailers, there wass a familiar tone. There has been another drop in sales as predictions have not even met last year's poor results, let alone the buoyant figures that could be expected in the days before e-commerce. This year's numbers also hint to a new
factor in the evolving high-street story. Are consumers changing and, to an extent, consuming less? The results from Morrisons show declines
in their sales of food and drinks, and positions them as the worst performing supermarket. The resignation of John Lewis’s managing
director also points to a tough progress with the group's reorganisation, which includes Waitrose. The model of the supermarket or the department store hosting rows of mass- consumption brands is proving ever less popular for better informed resource-aware, climate-conscious consumers. In previous years, explanations for poor
Christmas trading figures have been levelled at the clothing sector or areas such as toys and household items. This is still the reason given for Sainbury’s lower results closely linked to its ownership of Argos. The decision to avoid heavy discounting
among the big retailers prevented results from being even worse. Tesco’s results even show slight growth, primarily because of the performance of Booker Cash and Carry stores. This brings further evidence to the change in consumer behaviour, where wholesale equates to bulk purchases and even a return to a preference for the model of the traditional drysalter where goods are sold by weight and taken home in the consumer’s own containers. Poor results at the supermarkets suggest
we are actively and collectively consuming less during the festive session.
Dr Gordon Fletcher Academic unit head, University of Salford Business School
Regulatory update on supercomplaint
The Competition and Markets Authority (CMA) has published its response to the super-complaint that Citizens Advice made in regards to the loyalty penalty in December 2018, making a series of cross- cutting and market-specific recommendations in the mortgage, cash savings, and home- insurance markets. The Financial Conduct Authority (FCA)
said in a statement: “Ensuring that markets work well and provide fair outcomes for long-standing and vulnerable consumers continues to be a priority for us. “This means making sure that consumers
receive good value products overall. Price is an important aspect of competition, but we also want to see firms offer good quality products that perform as consumers expect them to. We expect firms to look after the interests of all customers and to treat them fairly. Where we have concerns about conduct by firms, we will explore all options to address this using our full range of powers. “We have worked closely with the CMA
since they received the super-complaint and will continue to do so.
“Before the CMA published its super-
complaint response last year, we had already begun work in the mortgages, cash savings, and the home and motor insurance markets. “Several of our key cross-cutting projects
are also designed to address the harms which are felt by groups of consumers impacted by issues in the CMA’s work.” On mortgages, in March 2019, the FCA
published the Mortgage Market Study Final Report, and announced changes to its responsible lending rules and guidance. It said that this would help remove barriers to consumers switching to a more affordable mortgage and reduce the time and costs of switching for all relevant consumers.
Vulnerability is up for professional discussion
Senior professionals from the credit and collections industry are to gather to discuss the important issues around vulnerability and financial difficulty. The latest of CCRMagazine’s successful
range of discussions will be run in association with Lantern. Stephen Kiely, editor of CCRMagazine,
said: “Vulnerability and financial difficulty must now be at the very heart of the industry’s thinking and operations, so we are delighted to, once again, be working with the team at Lantern to facilitate a knowledge-sharing debate, aiming to increase understanding and share best practice.
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www.CCRMagazine.com “As we seek to move forward as a dynamic
and high-profile industry, communication will be essential in allowing progress to be made, so this debate promises to be another step in this journey.”
January 2020
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