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Gloom not lifted by October sales

Retail sales figures from the Office for National Statistics are expected to show that sales in October have either fallen by 1pc or remained flat.

The figures will come after a pretty ropey few weeks for some of Britain's biggest retailers. Some such as Mothercare, Carpetright and Game Group have issued dire profit warnings.

Tesco's like-for-like UK sales have fallen into negative territory for the first time in 20 years.

Capital Economics, the forecasting house, is predicting that sales volumes in October will have fallen by 0.2pc, after the surprise 0.6pc jump in September.

Howard Archer, at IHS Global Insight, has pencilled in a fall of 0.1pc. He said: "Survey evidence for October from the Confederation of British Industry and the British Retail Consortium, in particular, point to muted retail sales in October.

This is worrying news for retailers as the critical Christmas sales season looms. It also fuels concern that the economy is in danger of stagnating or even worse in the fourth quarter, given the critical role of consumer spending (it accounts for some 63% of GDP on the expenditure side)."

Even though Sir Mervyn King, the governor of the Bank of England, said this week that he though that inflation has peaked, most consumers are far worse off than a year ago because of record gas and electricity bills, stubbornly high petrol prices and high train tickets.

The squeeze on family finances has left the average household with £163 of weekly disposable income – down by 8.4pc from this time last year, according to the CEBR/Asda income tracker.

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