Encouraging pick up for Christmas sales

Published:  22 November, 2013

According to the latest Retail Sales Monitor from the BRC and KPMG, UK retail sales were up 0.8 per cent on a like-for-like basis from October 2012. On a total basis, sales were up 2.6 per cent.

Food sales growth during the last three months averaged 2.0 per cent – below recent levels of inflation – indicating shrinking volumes. Clothing experienced a decline in total sales for the first time since March, affected by unseasonably warm weather. Strong growth in Other Non-Food points to an encouraging start to the festive season.

British Retail Consortium director general Helen Dickinson said: “It’s encouraging to see growth heading in the right direction again after a disappointing slowdown in September. Much of the improvement was driven by sustained demand for new games and gadgets, and there was also a strong showing for home accessories and textiles.

“In contrast, clothing sales fell for the first time since March, suggesting that many customers prioritised leisure and home improvements over refreshing their wardrobes until more autumnal conditions took hold.

David McCorquodale, head of retail at KPMG, said: “October was another difficult month for retailers reminding us that recovery is a slow, relentless slog. While the summer months hinted at increased consumer confidence, retailers will struggle to maintain a sustained sales recovery until wage growth outpaces price inflation. While confidence may lead consumers to browse, it’s cash that’s needed in the tills.

“Clothing and footwear had a difficult month as temperatures refused to drop, while other non-food items such as electricals performed better, aided by the online channel.

“The next two months are vital with stock holdings, merchandising and margins being key to success. Shoppers seem reluctant to buy their gifts early and at full price and many may be delaying their purchases in the hope that retailers will discount festive goods as the big day nears.

“Christmas has always been retailers’ golden goose and a good performance in the next two months will help those in the red move back to the black,” McCorquodale concluded.

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