We'd rather keep what we have, shoppers say
A flurry of pre-Christmas offers has failed to lure customers into the shops, disturbing figures from the ONS reveal. But James Thompson sees some shreds of hope
Fierce discounting on the high street failed to tempt shoppers to spend last month, fuelling fears of a miserable Christmas for many retailers. The Office for National Statistics said retail sales volumes fell by 0.4 per cent in November on the previous month, which was lower than the 0.3 per cent decline economists had expected. The weak figures add further weight to the expectation that a number of retail chains will collapse into administration after the first-quarter rent day on 25 December, after the demise of shoe group Barratts Priceless this month.
However, the ONS provided some hope for festive trading prospects by revising up its estimate of sales growth to 0.7 per cent over the past three months, which suggests that autumn trading had not been as bad as feared.
Indeed, the sportswear specialist Sports Direct and the suit retailer Moss Bros both posted strong performances yesterday, proving that chains with strong management teams and the right product offer are making gains.
But for the sector as a whole, November will go down as a month to forget, as consumers continued to cut back on high street spending in the face of stubbornly high inflation, anaemic wage growth and rising unemployment, which hit a 17-year high of 2.64 million this week. Stripping out the impact of petrol, retail sales volumes fell by 0.7 per cent in November, the ONS said.
This was despite widespread discounting across the sector.
Charles Lamplugh, the lead relationship director for retail at Lloyds Bank Corporate Markets, said: "Unseasonal weather has resulted in higher stock levels in the last quarter of 2011, meaning that November has seen a higher-than-usual amount of discounting. Retailers are looking to bring their stocks back to a comfortable level by the end of the year."
According to a separate survey from the accountancy firm PricewaterhouseCoopers, 66 per cent of high street retailers are running sales or advertising promotions, such as three for two, this week – higher than the 55 per cent last year, but down on the 80 per cent in 2008. Mark Hudson, the retail and consumer leader at PwC, said: "The traditional game of chicken between retailers and consumers is hotting up as Christmas approaches."
Accounting for the impact of higher prices, retail sales by value jumped by 4.6 per cent in November on the same month last year, with volumes rising by only 0.7 per cent.
In terms of individual retail sectors, sales volumes were down at food stores by 0.6 per cent in November over the year, and chains selling primarily non-food products fell by 0.7 per cent.
Stephen Robertson, the director general of the British Retail Consortium, said: "The evidence we're receiving suggests consumers have approached this Christmas with great caution, reining in their spending in November."
Perhaps demonstrating how higher petrol prices have reduced trips to out-of-town retail parks, small stores grew annual sales volumes by 4.5 per cent in November, compared with a 0.1 per cent decrease at large stores.
Furthermore, spending on the internet continues to power ahead to account for 12.2 per cent of all retail sales. Illustrating the full force of internet Christmas shopping, the average weekly online spend surged to £787.9m in November, up 44 per cent on the £546.4m taken in the previous month.
More positive news came from Sports Direct which posted flat pre-tax profits of £100.3m over the 26 weeks to 23 October, on group revenues up 8.4 per cent to £888.6m. Moss Bros grew like-for-like sales by 10.5 per cent over the 19 weeks to 10 December, as it benefited from robust demand for its own-brand products and selling a higher proportion of premium suits, including Ted Baker and French Connection.
Shop shape: Life on the high street
Blacks Leisure Has debts of £36m and forced to seek buyer after shareholders balked at cash call. Sports Direct, Mountain Warehouse and Go Outdoors, among others, could bid for part or all of the business.
Game Warned on profits in November and has called in the restructuring team at Deloitte.
Peacocks Plans debt-for-equity swap with Goldman Sachs and mulling closure of up to 200 shops.
HMV Shares at 3.9p, debts of £171m and latest sales down by 15.1 per cent.
Carpetright Half-year operating profits down by 93 per cent to £800,000 and passed on a dividend.
Mulberry Profits up 231 per cent to £15.6m in the six months to 30 September, on sales of £72.3m.
Sports Direct Half-year profits held at £100.3m and revenues up by 8.4 per cent to £888.6m over 26 weeks to 23 October.
Morrisons Grew sales by 2.4 per cent over 13 weeks to 30 October, ahead of listed rivals Tesco and Sainsbury's.
Kingfisher (owner of B&Q) UK and Ireland division grew profits by 22 per cent to £56m for the 13 weeks to 29 October.
Burberry Delivered 26 per cent rise in profits to £162m for six months to 30 September, on total revenues up 29 per cent to £830m.
- 1 Rarest Beanie Baby bought for just £10 at car boot sale could be sold for £62,500 on eBay
- 2 Katie Hopkins and The Sun editor are reported to police for incitement to racial hatred following migrant boat column
- 3 Giorgio Armani criticises the way some gay men dress saying 'a man has to be a man'
- 4 Rebecca Francis accuses Ricky Gervais of using 'influence' to target female hunters after receiving barrage of death threats
- 5 Australian student Tommy Connolly, 23, adopts his pregnant, homeless 17-year-old cousin to give her a chance at 'a better life'
Rarest Beanie Baby bought for just £10 at car boot sale could be sold for £62,500 on eBay
Katie Hopkins and The Sun editor are reported to police for incitement to racial hatred following migrant boat column
'Jihadi John': Isis executioner Mohammed Emwazi wanted to wage jihad in Somalia until his friends were betrayed and killed by al-Shabaab
Parma, Missouri: 80 per cent of town's police quit after first black mayor is elected
Australian student Tommy Connolly, 23, adopts his pregnant, homeless 17-year-old cousin to give her a chance at 'a better life'
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
The only black face in the Ukip manifesto is on the page about overseas aid
Ukip is the only main political party to not address LGBT rights in its manifesto
Food banks: One million Britons will soon be using them, according to Trussell Trust
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
iJobs Money & Business
£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...
£30 - 35k (DOE): Guru Careers: We are seeking a Pricing Analyst with experienc...
£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...
£21000 - £24000 per annum: Ashdown Group: The Ashdown Group has been engaged b...