Weekly data for the four weeks through Oct. 26 revealed an uneven month: Sales fell in the first and final weeks but strengthened mid-month, suggesting intermittent consumer confidence. The past week, which coincided with the start of the half-term school holidays, saw declines across in-store and online channels as families feeling the squeeze prioritized spending on experiences and travel over retail purchases, BDO said in a press release.
UK retailers entered the Golden Quarter on a fragile footing as high inflation and weak consumer confidence dampened October sales, according to BDO. Store sales rose 1.1 percent, but overall sales remained flat, ending a four-month growth streak. BDO warned of the risks of early discounting and pre-Budget uncertainty as shoppers prioritized essentials and experiences over discretionary purchases.
“Our data makes for pretty scary reading for retailers this Halloween. After several months of positive momentum, October has brought a stark reminder of how fragile consumer confidence remains. As we predicted last month, shoppers are still plagued by high inflation, particularly in food, while uncertainty about their household finances keeps a firm grip on discretionary spending. Consumers are being very selective, and many are prioritizing spending on essential items and experiences over non-essential goods,” he said. Sophie Michael, BDO Retail and Wholesale Director.
“The timing of this year’s fall budget, just two days before Black Friday, adds another layer of pressure. Retailers are being forced to make critical investment and promotional decisions without a clear view of the fiscal landscape,” Michael added.
“After a disappointing October, we expect to see earlier and longer discounting to stimulate demand. But that strategy has its risks. Deep discounting too soon erodes margins and leaves companies with a tough start to the new year. Retailers will have to strike a careful balance, using promotions strategically to keep customers interested while protecting profitability,” Michael said.
Fiber2Fashion News Desk (SG)
