The rate of growth has in fact been slowing over the past year - the first half to July saw like-for-likes up by 0.9%, but the second half (to 31 January) was virtually flat.  Over the year from its 251 stores Comet produced total sales of £1.73 billion (up 3.3%), helped by strong demand for flat screen televisions and laptops, but white goods were weak.  Web-generated sales grew by 23%, with increased demand for 'click and collect'.  Retail profit fell by 4% to £44.2 million, but the previous year enjoyed a £3.5 million boost from a property deal at Fosse Park.

Naturally the group remains concerned about the decline in consumer confidence - the latest GfK NOP survey (at the end of March) suggests it has now reached its lowest level for 15 years - so Kesa anticipates that trading conditions for the year ahead will be "difficult".  The focus will be on "optimising margins and controlling costs whilst enhancing its specialist service proposition".  

Confidence

The wintry weather and early fall of Easter enticed many into shopping centres and away from the usual haunts of gardening and DIY stores.  One beneficiary was John Lewis.  As I mentioned last time, the department store group had enjoyed another good year to the end of January with sales of 'electricals and home technology' up by 6% (compared with Comet's 0.4% on a like-for-like basis).

JLP's sales in February were 'soft' but even so, electrics still managed a 3% year-on-year uplift.  Helped by a decent Easter week (16% up against Easter 2007), sales in March rose by around 6%, with double figure increases in the last fortnight (to 29 March).

 Comparing performance against last year has been difficult for all retailers, with different timings for Easter and school holidays, plus regional complexities and the inclement weather, so we must all wait untill the end of April before a proper picture emerges, but there is little doubt that John Lewis continues to win market share across key categories. 

New chairman Charlie Mayfield explained the transformation: "In some ways, the last seven, eight, nine years have been an awakening for the Partnership. We started to look outside and become more open to the outside world and all of that has had a galvanising effect on the business. We have been able to measure ourselves against the competition, not to emulate them, but to see where we could do better and realise where we are very, very good.  By focusing more externally, we have grown more confident about what we can achieve, how good our people are and so have become more ambitious. There has been a quiet revolution. We've modernised and we can be a really powerful force in UK retailing."

The ONS basket

The Office of National Statistics collects about 120,000 prices every month for a basket of about 650 goods and services using the data to calculate the retail price index.  This year's review sees the removal of two electrical items - microwave ovens and television repairs - due to lower product prices and increasing reliability, with the ONS noting that "customers now prefer to replace worn TVs rather than repair them, which usually warrants a switch to HD-ready technology and flat-panel televisions".

That'll be no surprise to hard-pressed service-based independents, and another bedrock is coming under ever-increasing pressure.  Banks and finance houses used to take great comfort from the reliable income flow from rental activities.  Now, with the sub-prime nightmare very much in their minds, they are downgrading values - all very predictable given the way the rental market has fallen away, and customer terminations have rocketed.  New product investment is thus more difficult to justify, and cascading returned sets down the chain is no longer an easy option, as even the most impecunious customer wants new product.  The days of selling off ex-rental sets to generate profit and cash flow seem rather distant.

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