British high street retailers are off to a slow start this Christmas season as shoppers are holding off on their purchases in the hope of snagging up last-minute bargains, recent figures reveal.
Although retail sales increased slightly last month over November 2012, according to a monthly survey by KPMG accountants and the British Retail Consortium, retail sales across the UK only rose 0.6 per cent in November.
The average total sales growth from September to December stood at 2.4 per cent, while the average growth for the year is at 2.7 per cent, signaling a shopping slowdown thus far this holiday season.
These figures are another sign that measures to improve the UK economy have yet to result in increased consumer spending as more and more households across the UK are seeing their wages fall behind inflation.
David McCorquodale, head of retail at KPMG, said, “Shoppers are playing a waiting game and delaying purchases for as long as possible in the hope of securing a discount.”
However, Helen Dickinson, the BRC director-general, stated that sales growth picked up during the last week of November as the one-month run-up to Christmas got underway.
“Christmas spending looks on course to be an improvement on last year, but December will decide it,” she said.
She continued, however, by saying, “The overall sluggish growth this month and over the last few months suggests this festive season will be challenging for the retail sector.”
Howard Archer of IHS Global Insight echoes Dickinson’s concerns. He said, “Overall these figures come across as pretty lackluster. They show that retailers are not guaranteed to have a good Christmas. Consumers are still under a lot of pressure and if they’ve spent a lot over the summer, they may not have that much in their back pockets for the festive holiday.”
The latest figures come after earlier figures revealed that retail sales stalled in October and the first weeks of November, indicating that British consumers are facing increasing pressure as wages are not keeping pace with rising living costs.
The SpendingPulse report also showed less than stellar retail sales figures in November. “With Christmas fast approaching, the SpendingPulse report for November indicates once again that consumers are cautious about spending hard earned cash,” said Marion King, president of MasterCard Ireland and UK.
However, looking at the 2.4 per cent growth figure, Sara Quinlan, MasterCard Advisors’ senior vice president, remains optimistic, saying, “Once again the continued growth in the online sector is good news and as we approach crucial spending periods in the ecommerce calendar we are hopeful that this positive trend will boost the overall retail sector this festive season.”