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Wednesday, December 8, 2010

Shops facing an unhappy Christmas as sales struggle

Shops facing an unhappy Christmas as sales struggle ; The high street delivered anaemic sales growth in November for the eighth successive month, which along with the recent snow has left retailers biting their nails over festive trading. Clothing and footwear chains benefited the most from the colder weather last month, but homewares and furniture chains toiled, as nervous consumers avoided big-ticket purchases.

Like-for-like sales on stores open at least one year grew by just 0.7 per cent in November, compared on the same month in 2009, according to the British Retail Consortium and KPMG Sales Monitor survey. This followed similarly weak underlying sales growth of just 0.8 per cent and 0.5 per cent in October and September, respectively.

Stephen Robertson, the director general of the British Retail Consortium, said: "It's been another tough month. Customers are cutting back because they're worried about prospects for their own jobs and personal finances."

Total sales, which includes new stores and shop extensions, rose by a lacklustre 2.8 per cent – the eighth month running of low growth.

Given that the rise in VAT to 17.5 per cent in January has pushed up annual shop price inflation to boost sales by value, Mr Robertson said that "underlying volume growth is virtually zero". The figures from the BRC-KPMG survey will concern retailers, particularly as they do not cover trading in early December, which has been badly affected by the heavy snow.

Online retailers, such as the fashion specialist Asos, are thought to have benefited from the snow, as consumers shopped at home instead of venturing out to battle the elements. But this will not be fully reflected until December's data is released. The BRC said that non-food, non-store sales grew by 17.6 per cent in November.

Mr Robertson said: "The extreme weather has undermined sales over the last 10 days. Retailers will be hoping disruption eases so that sales lost early in the month are made up over the next couple of weeks and not lost entirely."

The grocers were cheered by food sales growth rising a "little further" in November. Steve Barnes, the business director at the Institute of Grocery Distribution, the food industry trade body, said: "The countdown to Christmas has begun in earnest, with shoppers already benefiting from widespread food and grocery promotions and discounts. For food and drink retailing, the signs are encouraging."

While retailers expect to get a boost from consumers bringing spending forward ahead of VAT rising to 20 per cent on 4 January, this does not yet seem to have materialised in the car sector – where its impact should be far greater. The Society of Motor Manufacturers and Traders said that sales of new cars fell for the fifth consecutive month in November, with registrations down 11.5 per cent on a year ago. http://www.independent.co.uk For the latest updates PRESS CTR + D or visit Stock Market news Today

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