Consumer confidence plummets to new low
Published 11/11/2008 | 08:44
Retail sales are lower than they were 12 months ago — the first time they have fallen over a 12-month period since April 2005, new figures revealed yesterday.
UK sales fell 2.2% on a like-for-like basis from October last year — the worst figures for three years, according to the British Retail Consortium-KPMG Retail Sales Monitor.
The drop leaves total sales 0.1% lower than they were in October last year.
The BRC said the “seriously poor numbers” reflected plummeting consumer confidence.
The figures for the four weeks to November 1 show food and drink was the only sector to show sales significantly up on a year ago.
Sales of clothing and footwear remained poor and often discount-driven, despite colder and much wetter weather than last October, while furniture and homewares sales fell further below those of a year ago, the report said.
Discounts and promotions had often failed to tempt consumers, the figures showed.
They also revealed online sales fell in the days after the banking crisis hit, suggesting consumers were anxious about their finances.
BRC director general Stephen Robertson said: “These are seriously poor numbers, especially in the run-up to Christmas.
“For the first time in more than three years total retail sales fell into negative territory — further evidence of how difficult trading conditions are for retailers.
“Like-for-like sales have now fallen in seven of the last eight months, with every sector down on a year ago apart from food and footwear.
Shoe sales were driven by extensive discounts.
“The negative sales figures reflect record low consumer confidence.
“These are tough times for families and retailers, who are hoping the Bank of England’s bold interest rate cuts will provide a much-needed boost.”
Helen Dickinson, head of retail at KPMG, said: “A fall in the value of total sales is extremely rare.
“With shop price inflation rising at about 3%, the extent to which consumers have reduced the volume of purchases becomes apparent.
“This is hardly surprising given the uncertainty created by the financial markets and its knock-on implications.
“It is unlikely that the much-needed 1.5% rate cut will influence Christmas spending patterns. Historically, it takes a number of months for rate cuts to feed into spending.
“Retailers can only hope that the October performance is not representative of consumers’ spending intentions.”