Retail sales fall in November
05 December 2011 09:46
Retail sales continued to fall in November despite "panic" levels of discounting on the high street, a monthly survey said today, spelling more gloom for the sector.
Mid-tier retailers saw like-for-like sales fall 1.7% last month, BDO's High Street Sales Tracker said, as unseasonably warm weather hit fashion sales, which dropped 1%. Non-fashion slumped 3.1% and homewares was down 2.6%.
BDO said the drop in sales came despite heavy promotion activity to pull in cash-strapped consumers, which is on a par with "panic sales" of 2008 and is expected to hit retailers' profit margins.
Don Williams, national head of retail and wholesale at BDO, said: "Throughout 2011 we've seen the high street polarising between high performers and strugglers.
"The former are surviving despite the tough climate, but the latter have found failing to offer consumers high levels of service and innovative, new products at the right prices is a quick route to very quiet tills."
The retail sector has fallen victim to a far-reaching consumer spending squeeze, driven by high inflation, muted wage growth and weak confidence as the economic outlook continues to worsen.
Major players from Mothercare to HMV, Dixons Retail to Argos-owner Home Retail Group have all reported tough conditions, with only a small number, such as John Lewis, bucking the trend.
The conditions are not expected to improve in the run-up to the critical Christmas period despite increased promotions, BDO said.
The non-store sector, that is online and mail order shopping, grew 9.4% in November but was slower than previous months.
However, there was some respite from the gloom yesterday with figures from the owner of some of the UK's largest shopping malls and from John Lewis suggesting the tide had turned in the past week.
A spokeswoman for Capital Shopping Centres, which own the Trafford Centre in Manchester and Lakeside in Thurrock, said in the last week a record number of shoppers have walked through their doors.
More than seven million shoppers went to the 14 centres belonging to the group in the last week.
Likewise, department store chain John Lewis reported weekly sales exceeding £113 million.
In the week to Saturday December 3 sales rose 15.1% on the previous week to £113.6 million.
A spokesman for the company said that popular items included warm winter clothing, kitchen gadgets and furnishings, chairs and tableware.
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