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UK retailers ‘hanging on’ as 2011 stumbles towards Christmas

The latest figures from the BDO High Street Sales Tracker show the final quarter of 2011 is proving to be as tough as the rest of the year, with total retail sales dropping last month by 3.1% on a like-for-like basis.

With consumer confidence at rock bottom due to the fragile economy at home and the rumbling crisis in the Eurozone, the unseasonably mild weather was all it took to persuade consumers to delay winter wardrobe purchases and reduce like-for-like fashion sales by 3.1%. Non-fashion sales also slumped 3.3% and homewares fared only slightly better, with sales growth down 0.6% year on year.

On the upside, the 20.7% growth in non-store sales shows how retailers that have invested in their multi-channel capabilities, such as Next, have been able to partially offset the slump in high street sales. Various analyst reports also indicate that consumer confidence is not completely broken.

Don Williams, National Head of Retail and Wholesale at BDO LLP, said: “Despite the unremitting flow of bleak news, the non-stores sales show consumers’ underlying desire to spend is still there. At the moment there aren’t many reasons to shop but retailers must continue to work hard to provide those reasons by offering ‘too good to miss’ deals and great service.”

Williams added that stores reaching for the panic button would do well to remember Christmas is less than two months away and retailers who have survived thus far should hang in there for Christmas and a New Year sales boost.

“Christmas has not been cancelled in two thousand and ten years and there are no indications it will be this year; Kids will be getting presents this year and that means parents will hit the shops at some point,” said Williams.

“Rather than slapping the ‘sale’ sign on everything, our best retailers continue to plan a series of regular discounts that will get people over the threshold without eating into margins too much.”

Source : Kam City News

08 November 2011
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