A retail body has warned that present trading levels are a “cause for concern” for stores in the run-up to the Christmas Season. However Primark, at least, appears to be opposing the trend.
The British Retail Consortium said that its reading of 0.2 percent increase in non-food sales over the twelve months to October was the weakest since its records started.
It said that the surge in inflation – that is currently outstripping average wage increased – had made life hard for shoppers and therefore its members generally.
The BRC said that it did not believe that the increase in interest rates by the Bank of England – that is intended to help tackle inflation – would help since it had also increased borrowing costs.
It painted a gloomy picture as the owner of Primark reported a 10 percent surge in like-for-like sales in the United Kingdom during the year to September 16.
Associated British Foods said that the discount fashion chain had performed particularly well in this country, partially crediting a decision not to pass on additional costs to customers that are arising from the weakness of the pound since the European Union referendum.
While that gave some pain to profit margins, it said that new store openings helped the overall adjusted operating profits of Primark increase 3 percent on a consistent currency basis to £735m.
The retailer said that there were no plans to reduce its pace of expansion despite the woes of the wider sector.
Rival New Look joined the series of those that are reporting tough trading when it reported an underlying operating loss amounting to £10.4m for the six months to September 23. It said that sales were 8.4 percent down on the same period in 2016.
Market forecasts imply that other retailers that are due to update on their progress this week, especially M&S, will continue to disappoint in the fashion stakes.
The BRC’s chief executive, Helen Dickinson, stated: “It was a meager month in October for retail sales as shopping activity slumped.
“With total growth at its lowest since May and below the 12-month average, retailers will have cause for concern as they prepare for the crucial run-up to Christmas.
“The decline was driven by the worst performance of non-food sales since our record began in January 2011, as consumers appear to have opted for outdoor experiences and excursions during half-term, over visits to the shops.”