Retail sales fall for second consecutive month

Christmas Shoppers

UK retail sales have fallen for two consecutive months for the first time in 13 years, leaving retailers anxious for better Christmas sales, according to the British Retail Consortium (BRC)

Christmas Shoppers

Their research found that total sales were down 0.4% in November from a year earlier, following a 0.1%decline in October. It was the first fall in overall sales for two months in a row since the BRC survey was first conducted in 1995. BRC director general Stephen Robertson said:

“Retailers will be hoping that customers have been putting off Christmas shopping — not cancelling it. With money tight at the moment shoppers can take advantage of the extraordinary level of deals, offers and promotions. The recent VAT and interest rate cuts may also provide some stimulation.”

However, BRC spokesman Richard Dodd warned that this not likely to be enough for December sales to increase on last year.

“December clearly isn’t going to be any kind of bonanza as people are short of money and nervous of spending it, so total sales may only be similar to last year, if not down on last year,”

“Conditions are tougher for small and medium–sized retailers, as their unit costs are higher, they are less able to offer the discounts that big retailers can, and they’ve got the disadvantage of not having such a clearly defined brand in customer’s minds. People are likely to rein in their spending in January, which means retailers will have to do even more discounting and promotion to tempt them out.”

KPMG head of retail Helen Dickinson added:

“It’s possible that November’s figures have gone down because consumers delayed purchases in the last week of the month following the VAT announcement, while they waited for the change to be implemented. There is little doubt that Christmas will arrive late for many retailers, leaving them with a very nerve–wracking couple of weeks to come.”

The survey also revealed that sales of footwear, clothing and furniture have fallen since last year, but food and drink sales have increased. Richard Dodd continued:

“The food sector is the only one showing growth, partly because everyone has to eat, and partly because even though food price inflation has slowed very sharply from its peak earlier in the year, it is still running at 7.1% so it costs more to buy the same amount of food”

According to the survey, online sales grew by 9.5% in November from last year. The BRC said that this was due to customers using the internet to take advantage of online discounts, as well as their increasing trust in payment security and the reliability of deliveries.

British Shops and Stores Association (BSSA) chief executive John Dean said that retailers need to concentrate on their strengths to maximise December sales.

“The larger than normal migration to internet selling will be hitting those retailers who have no presence on the web. Our advice is to hold your nerve, identify the things you do well, try to create a point of difference, concentrate on your core offers and try to do them better than ever.”

For more information about selling on the internet, read our trading online article.

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