December 6, 2011 12:00 am

Retail sales record weak rise

Sales on Britain's high streets in November registered their lowest year-on-year rise since May, amid anecdotal evidence of heavy discounting, a survey shows.

Sales rose by 0.7 per cent compared with November 2010, according to the British Retail Consortium’s monthly monitor.

“The weakest increase in sales for six months suggests consumers are keeping a tight rein on their spending, despite Christmas being so near,” said Stephen Robertson, director-general of the BRC. “Consumers are not quite in the Christmas mindset yet, although stores are working to generate much-needed sales with high levels of festive discounting.”

The weakness was marked in non-food purchases, where totals were 0.5 per cent below those of 2010. With the exception of footwear, every non-food category showed a decline, with department store sales suffering as consumers deferred big-ticket purchases and discretionary items.

The BRC found several categories that had been particularly subject to sales promotions, including “white goods” such as refrigerators, other electrical items and homewares. Furniture and floor coverings appear to have been hit by unseasonably mild late autumn weather.

“Cash-strapped consumers continue to be reticent, and last week’s gloomy economic forecast by the chancellor won’t help to boost confidence levels,” said Helen Dickinson, head of retail at at KPMG professional services.

“Any sales are hard won, with high discount and promotion levels. December will require some tough decisions for a number of retailers as they struggle to plot a path in such challenging conditions.”

In the three months to the end of November, sales of non-food items fell by 0.5 per cent – the second consecutive rolling three-month drop.

However, food sales appeared to be moving ahead, rising 4.6 per cent on the year. The increase was in line with that seen in October, itself a five-month low.

Joanne Denney-Finch, chief executive of IGD, a food and grocery consultancy, said her group’s surveys found that shoppers were still prepared to splash out for high-end goods.

“Despite the extraordinary economic climate, our research also shows eight out of 10 people are still prepared to pay extra for premium food and groceries,” said Ms Denney-Finch. She noted that 71 per cent of those surveyed by IGD said they would spend as much or more on their Christmas meal compared with 2010.

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