Retailers fear for Christmas sales as high street suffers in the gloom

Like-for-like sales fall 0.6 per cent in October from a year earlier as shoppers concentrate on essentials

Retail sales fell last month, raising fears that Britain's ailing high streets will miss out on a desperately needed pre-Christmas boost.

Like-for-like sales were down 0.6 per cent in October from a year earlier with food and non-food purchases both suffering, according to British Retail Consortium (BRC) figures.

Clothing and footwear were hit by the unusually warm early autumn and wary shoppers who decided to put their essentials and replacements above discretionary buys.

The figures paint a gloomy picture of consumer confidence ahead of a Christmas trading period that could be make or break for some embattled retailers.

The high street slowdown raises fresh fears about the slowing economy only three weeks before the Chancellor, George Osborne, presents his Autumn Statement.

Stephen Robertson, the director general of the BRC, said: "This is evidence of the basic weakness of consumer confidence and demand and is worrying this close to Christmas. It's clear customers are cutting back, whatever they're buying.

"A lasting lift in consumers' mood needs a sense that better times will come for jobs, costs and incomes."

He called on Mr Osborne to support retailers with measures to soften next year's planned fuel duty and business rates increases.

The market for homeware sales was tough and continued to be driven by heavy discounting, which eats into stores' profits.

Helen Dickinson, the head of retail at KPMG, said: "Margins and hence profits are being impacted to stimulate demand as retailers strive to cope with the new reality. The success of the Christmas season for retailers hangs in the balance."

The economy is slowing as consumers struggle with rising taxes, job insecurity and high inflation. The woes of the eurozone have also hit household and business confidence.

The BRC figures added to a slew of other weak economic indicators showing consumer and manufacturing confidence weakening.

A Visa survey shows consumer spending at its lowest last month since May. A British Chambers of Commerce (BCC) report found that one in five exporters – one of the buoyant parts of the UK economy – is planning to cut jobs in the next few months.

John Longworth, the director general of the BCC, said: "Uncertainty around the UK's recovery combined with the eurozone crisis means that [export] growth has slowed in the last quarter. Order books have weakened, confidence in increasing turnover has softened and exporters' desire to expand workforces is muted."

An annual survey of British consumers by Absolute Strategy Research shows that more than half of Britons feel worse off than a year ago, with most blaming inflation.

Falling living standards have sent disapproval of the Government's economic record to more than 50 per cent, the survey says.

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