High street faces worst sales in three years
High street faces worst sales in three years
Tuesday 11th November 2008
The UK high street faced the worst sales in October for three years.Data from the British Retail Consortium (BRC) show like-for-like sales dropped 2.2 per cent on a year ago and total sales were down 0.1 per cent.
Over the three months to October like-for-like sales – which take out the effect of new and larger stores – were down 1.5 per cent.
Stephen Robertson, BRC director general, said: "These are seriously poor numbers, especially in the run-up to Christmas.
"For the first time in three years total retail sales fell into negative territory – further evidence of how difficult trading conditions are for retailers.
"The negative sales figures reflect record low consumer confidence. These are tough times for families and retailers, who are hoping the Bank of England’s bold interest rate cuts will provide a much-needed boost."
Helen Dickinson, head of retail, KPMG, however, did not predict the 1.5 per cent interest rate cut would boost spending.
"It is unlikely that the much needed 1.5 per cent rate cut will influence Christmas spending patterns - historically it takes a number of months for rate cuts to feed through into spending," she said.
"Retailers can only hope that the October performance is not representative of consumers' spending intentions for the next six weeks. However, there is no doubt retailers will need to resort to heavy discounting to bolster sales over this crucial trading period."
Like-for-like sales have now fallen in seven of the last eight months with every sector down on a year ago apart from food and footwear.
Food and drink was the only sector to show sales significantly up on a year ago, while footwear sales were driven by heavy discounts.
Joanne Denney-Finch, chief executive of IGD, explained the seasonal boost of Halloween and the first signs of Christmas promotions kept the momentum going during the latter part of the month.
"Retailers have been adjusting to a new economic reality by focusing on value, while IGD research shows consumers have been adapting by putting more effort into their grocery shopping – seeking out promotions, cooking from scratch, and searching out the best deals," she added.
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