Fears of winter freeze out as spending dips

Analysts fear poor Christmas sales as figures show diminished spending.

With footfall decreasing by two per cent year-on-year in October, retailers may need to brace themselves for a disappointing turnover this season.

The decline in shop visits mark out this October as the worst in four years, and the biggest fall since June 2016. Statistics from the British Retail Consortium also shows online sales have also moderated 2.2 per cent year-on-year.

Over the three months to October, store sales of non-food items fell by 2.9 per cent on a like-for-like basis. However a 2.4 per cent increase in food sales over the same period indicates shoppers are saving their money for essential items.

Mark Antipof, chief commercial officer at Visa, said: “Retailers will now be pinning their hopes on strong performance around Black Friday and Cyber Monday. November’s data will therefore provide the first real clue on how Christmas is shaping up.”

Sterling devaluation continues to be marked out as a factor in reduced spending. As the pound remains around 14 per cent weaker against the US dollar than it was two years ago, economists are continuing to observe reduced consumption as inflation skyrockets.

With the Christmas marketing well under way, retailers will be hoping for a surge in spending on Black Friday and Christmas week. However as inflation and interest rates continues to grow, the outlook remains uncertain.

Richard Lim, chief executive of Retail Economics said: “The squeeze on personal finances is expected to be at its most intense leading up to Christmas, which does not bode well for retailers.

“The persistent erosion of spending power over the last few months has begun to take its toll and shoppers are tightening their belts.”

 

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