BRC reports bleak early Christmas sales

UK retail sales values were 0.6% lower on a like-for-like basis from October 2010, when sales had risen 0.8%, according to the latest report from the British Retail Consortium.

On a total basis, sales were up 1.5%, against a 2.4% increase in October 2010.
Stephen Robertson, BRC director general, says, “Which part of the wave we’re riding varies from month to month, but the water is consistently chilly. For a fifth month, total sales growth continues its strangely regular flip-flopping between 2.5% and 1.5%. But, the year-to-date figure, which smooths out these minor moves, is unchanged from the previous month. This is evidence of the basic weakness of consumer confidence and demand and worrying this close to Christmas.

“Underneath the headline figure, the year-to-date results show almost no growth in non-food sales. Allowing for the VAT rise since last year that suggests a substantial drop in sales volumes while the food figures indicate very little volume growth. It’s clear customers are cutting back whatever they’re buying.”

Helen Dickinson, head of retail, KPMG, says, “One constant remains: to whatever extent sales are being made, 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 as October’s results do not set a strong foundation.”