LONDON (Reuters) – British outlets suffered a fall in underlying gross sales in December for the fifth straight yr, a survey confirmed on Friday, including to proof customers are tightening their belts.
Britons are being squeezed by gradual wage development and a leap in inflation that adopted the 2016 Brexit vote, prompting many forecasters to foretell an extra weakening within the general financial system this yr after a slowdown in 2017.
Accountancy and business advisory agency BDO mentioned its month-to-month High Street Sales Tracker (HSST) confirmed a 2.three p.c fall in like-for-like gross sales in December.
It mentioned style gross sales fell three.eight p.c, whereas gross sales of homewares have been up 2.5 p.c.
BDO mentioned its knowledge bolstered studies of a final minute Christmas shopping for spree. It mentioned all classes recorded year-on-year development within the week to Dec. 24, after destructive like-for-like gross sales within the first three weeks of December.
“With discretionary spend under pressure, shoppers have been forced to think twice before making their purchases and have shown a preference to prioritise spend on food and drink, home comforts and trips out to restaurants and bars this festive season,” Sophie Michael, BDO’s head of retail and wholesale, mentioned.
A separate survey from the British Retail Consortium (BRC) confirmed store costs fell by an annual zero.6 p.c in December, the sharpest decline since March 2017, as retailers provided bigger reductions for non-food items.
By distinction, meals value inflation picked up final month.
“Many non-food retailers have been keeping prices low to stimulate spending, which will undoubtedly have come at a cost to margins,” mentioned Mike Watkins, head of retailer and business perception at Nielsen, which performed the BRC survey.
Department retailer chain Debenhams issued a revenue warning on Thursday after it was pressured to chop costs to drive gross sales of Christmas presents, illustrating the challenges going through a few of Britain’s greatest recognized retailers.
But clothes vendor Next, the primary main British listed retailer to report on Christmas buying and selling, beat expectations and upgraded its revenue outlook.
A string of retail firms, together with Tesco, Sainsbury‘s, Morrisons and Marks & Spencer, are scheduled to replace on festive buying and selling subsequent week.
Reporting by James Davey and Andy Bruce. Editing by Jane Merriman