16th Dec 11
British retailers struggle in Christmas build-up
by Harry Oldfield
Cold turkey: retailers losing money as they are forced into massive discounts
Cold turkey: retailers losing money as they are forced into massive discounts
The UK’s high streets saw retail sales slump more than expected last month despite heavy discounting.
Britain’s retail sales volumes dropped by 0.7 per cent in November, revealed figures from the Office for National Statistics (ONS), a poorer performance than the forecast for a decline of 0.4 per cent.
Retailers are struggling to cope with the toughest household incomes squeeze since records started in the 1950s. The sector’s shares have dropped quicker than the broader index during the last month and Deloitte has issued a warning that sales in December will be no improvement on last year. Retailers, including Morrisons and Debenhams, have already begun discounting to lure consumers.
The Centre for Economics and Business Research’s Shehan Mohamed said that annual value growth has slipped significantly from October’s figure of 5.6 per cent to 4.6 per cent in November, an indication that clothing stores and supermarkets are offering bigger discounts in the build-up to Christmas.
In spite of resilient sales performances in September and October, Markit’s chief economist Chris Williamson warned that the fall in November could represent the beginning of a renewed weakening in spending trends. He said that a drop of 4.5 per cent in last week’s Visa Expenditure Index was evidence that this could be the case.
Online shopping remained a plus point last month, as more sales moved to the internet. While supermarkets saw a fall of 0.6 per cent in volumes and non-food stores suffered a decline of 0.7 per cent, non-store retailing – mostly online based – saw a surge in volumes of 18.9 per cent.
Visa Europe has predicted that Friday 23 December would be the UK’s busiest shopping day ever – with over £1.5bn being spent on 33 million visa card transactions.
The high street weakness is being mirrored by the country’s manufacturers, which suffered the biggest decline in export orders in nearly two years in December. According to this month’s CBI industrial trends survey, a minus 32 per cent balance of manufacturers reported that their export order books were higher than normal, which was the lowest figure since January last year.
Citigroup economist Michael Sanders said that it seems obvious that any hopes Britain’s growth could be led by exports next year will have to be altered. The CBI report showed weaker domestic and international demand, and reinforced concerns that manufacturing could be a drag on growth during the fourth quarter.
Overall factory orders dropped to their lowest point in over a year this month, to a minus 23 per cent balance in comparison with November’s figure of minus 19 per cent. It was the fourth monthly fall in a row. Manufacturers announced that they were likely to reduce production during the three months ahead.
Our Stories
- Sandwich labels misleading shoppers
- Unemployment drops unexpectedly but worse still to come
- Tesco store managers see annual bonuses cut
- Royal Mail: half London sorting office to be sold
- Panasonic announces £3.4bn loss
- Thomas Cook attacks government over holidays at home promotion
- Clinton Cards falls into administration
- Wet April sees high street spending fall
- Five tough years ahead for UK jobs market
- Deal struck to save Thomas Cook
- Discount battle leads to sales decline at Morrisons
- Wetherspoon founder: pubs plans to be hit by taxes
Popular Topics
afghanistan al qaeda amazon Apple ASDA bank of england barack obama BBC british airways china david cameron Debenhams Egypt facebook george osborne Google India ipad iphone ivory coast japan Libya London M&S Marks & Spencer Morrisons nhs North Korea Office for National Statistics pakistan protests russia Sainsbury’s South Korea terrorism Tesco Tunisia UK UK retailers UK retail news UK shopping us Waitrose Wikileaks x factorArchive
- May 2012
- April 2012
- March 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- May 2009
- April 2009
- March 2009
- January 2009
