A retail body has warned current trading levels are a “cause for concern” for stores in the run-up to Christmas though Primark, at least, seems to be bucking the trend.
The British Retail Consortium (BRC) said its reading of 0.2% growth in non-food sales over the 12 months to October was the lowest since its records began.
It said that the surge in inflation – currently outstripping average wage rises – had made life tough for shoppers and therefore its members generally.
The BRC said it did not believe the rise in interest rates by the Bank of England – designed to help tackle inflation – would help because it had raised borrowing costs.
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It painted a bleak picture as Primark’s owner reported a 10% surge in like-for-like UK sales during the year to 16 September.
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Associated British Foods said the discount fashion chain had done particularly well in this country, partly crediting a decision not to pass on extra costs to customers arising from the weakness of the pound since the EU referendum.
While that delivered some pain to profit margins, it said new store openings helped Primark’s overall adjusted operating profits rise 3% on a constant currency basis to £735m.
The retailer said there were no plans to slow its pace of expansion despite the wider sector’s woes.
Market forecasts suggest other retailers due to report on their progress this week, particularly M&S, will continue to disappoint.
Helen Dickinson, the BRC’s chief executive, said: “It was a meagre month in October for retail sales as shopping activity slumped.
“With total growth at its lowest since May and below the 12-month average, retailers will have cause for concern as they prepare for the crucial run-up to Christmas.
“The decline was driven by the worst performance of non-food sales since our record began in January 2011, as consumers appear to have opted for outdoor experiences and excursions during half-term, over visits to the shops.”
Source: Sky