As Christmas draws closer and the High Street prepares for its busiest time of the year, the cold seems to have affected more than just the temperature: it’s also had a chilling effect on consumer confidence.
Figures from a variety of sources show weak consumer confidence heading into the Christmas season, with slow wage growth and uncertainty in the wake of Brexit contributing to the negativity on the High Street.
Non-food sales have taken a particular hit, with BRC-KPMG’s sales monitor showing that growth has fallen to the lowest level for five years. Shops selling both food and non-food items recorded a 2.2 percent slip in non-food sales and a 2.9 percent slide on a like-for-like basis. Over the last year, total non-food sales recorded a 2.1pc decline, the deepest drop since BRC-KPMG’s records began in 2012.
“October marked yet another reversal of fortunes for retailers, reinforcing just how volatile consumer spend has been,” said Paul Martin, head of retail at KPMG.
The latest figures from Marks and Spencer, released on Wednesday, seem to be in line with BRC-KPMG’s assessment. The group saw a further drop in clothing sales, vowing to speed up the closure of their non-performing clothing departments over the next year.
The British Retail Consortium also had similar figures for High Street trading, with like-for-like sales in October 1 percent lower than the same period last year. According to the BRC the key pre-Christmas trading period is off to a bad start, with credit card company also Barclaycard adding to the wealth of evidence that supports this view. The bank recorded consumer spending growth of 2.4 percent for October, below the current 3 percent inflation rate as households cut back on “nice-to-have” goods.
The car market has also taken a hit over the past couple of months, with figures from the Society of Motor Manufacturers and Traders showing the market is on course for its first annual decline since 2001. It is also set to weaken further in 2018, as the group recorded the seventh consecutive month of falling car sales.
With pre-Christmas figures like these, it seems as though the High Street’s winter collections may need to prepare for a frosty reception.
