The big freeze is no excuse for retailers
THE big freeze in the weeks leading up to Christmas is becoming one of the most excessively exploited corporate excuses since the death of Diana, Princess of Wales.
The road crash in Paris, news of which broke in the early hours of the Sunday of the August Bank Holiday weekend in 1997, was widely blamed by retailers for disappointing sales in the days which followed.
Undoubtedly, there was a short-term effect but was hard to believe that so many people cancelled purchases entirely.
Some retailers were still using the tragedy as an excuse in full-year or interim results published six or even 12 months later, by which time anyone who had been planning to buy or new carpet, sofa or washing machine had surely done so.
It remains to be whether retailers will continue to blame December’s snow and ice as the months pass but it seems entirely likely.
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In some cases, it may be justified. Mothercare, for example, had a point when it claimed that customers who were pregnant or had children in pushchairs were unwilling to turn out in potentially hazardous conditions to visit its out-of-town stores.
More generally, some sales specifically related to Christmas, whether of food or gifts, may have been lost as a result of consumers staying indoors or deciding to shop closer to home.
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In the main, however, the excuses do not stack up.
Tesco, for example, cited the weather as a factor behind its relatively modest sales growth but there seems little reason to believe that its stores were affected any more badly than those of Sainsbury’s or Morrisons, both of which did rather better.
Similarly, the snow does nothing to explain why Marks & Spencer put in a stronger pre-Christmas performance than Next.
It should also be noted that, in many cases, the disappointing figures reported in recent days are merely the continuation of an established trend.
It was, for example, pretty pointless of HMV to attach any blame to the weather for its latest sales woes when both its flagship music stores and its Waterstone’s book shops were already the subject of turnaround strategies as a result of previous disappointments.
It is also true, to a lesser extent, of Tesco which, while its sales remain in positive territory, has been under increasing pressure from Sainsbury’s and Morrisons for many months.
The effect of the snow, if there was any, would appear to have been a form of polarisation, with poorly performing retailers falling even further behind their rivals. But investors are entitled to explanations, not excuses.