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Friday 31 December 2010

Sales Forecasting “ ...‘tis the season to be jolly”? -Bellwethers for the Sales period of Christmas 2010/2011

A bellwether is any entity in a given market that serves to create or influence trends or to foretell future happenings. Bellwethers help in the challenges of Sales Forecasting.


The word is derived from the Middle English bellwether referring to the practice of placing a bell around the neck of a castrated ram (a wether) leading his flock of sheep. The movements of the flock could be noted by hearing the bell before the flock was in sight.






The department store John Lewis in Oxford Street, London has a slogan “never knowingly undersold” which was adopted in 1925. The West End store is considered a bellwether for the UK retail sector.



They recorded £27.8m of sales on December 27, up 54% on the same day last year. This number was 30% higher than the company's previous biggest day ever, December 27, 2008.


Across the three trading days since Christmas Day 2010, sales were up 26.2% against the same period last year.


The effect of the traditional Christmas sales coupled with the forthcoming increase in VAT at the beginning of January, is thought to have helped boost sales. This known in sales training circles as the cautionary close - "buy now while stocks last." John Lewis call their Sale a CLEARANCE Sale.
However a survey by the British Retail Consortium this week suggested that most retailers expected lower sales in 2011.


The increase in VAT on January 4 from 17.5% to 20% coupled with public spending cuts is likely to make consumers draw in their spending.


Another bellwether is the report from the British Retail Consortium (aka BRC), which said that the majority of big retailers said they expected 2011 to be worse than 2010. Likewise, analysts from Synovate market research arm of Aegis Group plc have released another survey that said Boxing Day sales were down 22.8% in 2010.
Click for Synovate website

BRC researchers questioned 17 of the UK’s biggest retailers, which together make up 51% of the total retail market by turnover. (The study took place from the 22nd of November to the 1st of December 2010.)


The study results showed that :-

64% of retailers said 2011’s sales would worsen

18% thought they would improve


18% said there would be no change.

The biggest concerns among retailers were weakening consumer demand and inflation.
Click for British Retail Consortium website

(view from top floor escalator at John Lewis, Oxford street ,London)

John Lewis reported £97.1 million in sales during the week leading up to Christmas, a 30% increase from the figures seen at the end of 2009.




Click for John Lewis Partnership website

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