Brexit chaos takes its toll on UK high street
London Briefing: The coming fortnight will be crucial for the retail sector; survey exposes broadband’s ‘forgotten homes’
Superdry’s clothing store on Regents Street in London. Shares in Superdry slithered another 8 per cent on Tuesday as former chief executive Julian Dunkerton stepped up his vocal campaign against the management.
There may only be 13 sleeps until Christmas but the festive spirit has yet to reach much of the UK high street, as the chaotic Brexit process takes a deepening toll on consumer confidence.
Following Primark’s recent warning of “challenging” trading conditions, John Lewis yesterday issued its own gloomy update. Sales at the department stores chain slid by more than 5 per cent last week, including a 7 per cent drop in its fashion and housewares departments.
The coming fortnight will be crucial for John Lewis and the rest of the retail sector, which is already bracing itself for the quietest Christmas since the credit crunch.
It’s not just sales that are down on last year – fewer shoppers are bothering to venture out to the high street, preferring instead to order online from the comfort of their sofas, their offices or the train home.
The retail consultancy Springboard is predicting a fall of 4.2 per cent in the number of shoppers visiting stores this month, which would make it the ninth December of decline in the last 10 years.
This follows a drop of 3.2 per cent in footfall in November, Springboard said, as the Black Friday boost benefitted largely online sellers and failed to flow through to physical stores.
Trading updates due in the next couple of days are likely to underline just how grim it is out there in what should be the high street’s “golden quarter”.
Dixons Carphone, which announced a raft of store closures earlier this year, is expected to detail further cutbacks to its bricks and mortar chain when it releases its first half results today.
Cash-strapped consumers have been holding on to their old mobile phones for longer, and the lack of lucrative upgrades has hit profits at the group. Analysts say new chief executive Alex Baldock, who took over in April, could be poised to axe up to 200 stores as part of his turnaround strategy.
Also reporting today is the former fashion high-flyer Superdry, which, as well as coping with dismal trading conditions, has become embroiled in its own nightmare before Christmas at the hands of co-founder and former chief executive Julian Dunkerton.
Shares in Superdry slithered another 8 per cent on Tuesday as Dunkerton stepped up his vocal campaign against the current management.
Dunkerton left the company, in which he still has an 18 per cent stake, in March after rows over strategy but now wants to return to run the business he helped create in 1985.
Along with the rest of the shares, the value of his stake has crashed by some 70 per cent since the start of the year as sales wilted over the scorching summer.
The former chief executive has embarked on a tour of institutional shareholders to convince them he should be reinstalled at the helm, having been firmly rebuffed by the management he said goodbye to in March.
Dunkerton is convinced he knows best, however. Pressing his case home last month, he told reporters: “I’m probably the most experienced human being in this industry in this country as we know it.”
As the countdown to Christmas continues, he’s unlikely to be backward in coming forward with his views on what’s expected to be another poor performance.
Pity the poor residents of Greenmeadows Park in Cheltenham. Their street has been named today as the place with the slowest broadband in the UK, with an average download speed of just 0.14 Mbps.
At this rate, it would take more than 100 hours for a Greenmeadows Park resident to download a two-hour high definition film on Netflix and at least 38 hours to download a 45-minute television show.
However, if they lived an hour’s drive away on Abdon Avenue in Birmingham, which enjoys the UK’s fastest broadband, they’d be able to download their Netflix film in less than four minutes and the television programme in little more than a minute, at an average speed of almost 266Mbps.
The broadband survey from price comparison site uSwitch.com puts the average broadband speed in the UK at 46.2Mbps but says more than a quarter of homes struggle with speeds of less than 10Mbps. This is the level judged by media industry regulator Ofcom to be the minimum requirement for households.
While uSwitch.com says its research lays bare the extent of the UK’s “digital divide” it also notes that faster services are available in some of the slower areas but consumers too often fail to switch providers. However, there remains more than one million “forgotten homes” that are unable to access even the minimum 10Mbps.
Fiona Walsh is business editor of theguardian.com