High Streets Initiative ยท 15 November 2018

Brexit nerves cast a chill over high street sales as consumers begin to tighten purse strings

Could Black Friday give UK high streets a welcome boost?

Growing Brexit nerves and mild weather have cast another chill over high street sales, new figures have shown.

The latest Office for National Statistics figures revealed that retail sales fell by a bigger than expected 0.5% in October as warm autumn days battered demand for cold weather clothes.

There was also a strong 3% decline in demand at household goods stores.

Overall in the three months to October sales grew by 0.4% markedly down on the 2.3% increase recorded in the three months to July.

Online sales performed better particularly textile, clothing and footwear, rising to 18% of total sales from 17.7% in September.

“Retail sales slowed after a buoyant summer with the mild autumn hitting winter clothes sales. Household goods sales also fell in October following two consecutive months of strong home improvements sales,” said ONS head of retail sales Rhian Murphy.

“Consumers chose to purchase goods from many stores? websites as online sales continued to increase.”

Analyst Samuel Tombs of Pantheon Macroeconomics said the fall revealed the “first real sign that consumers are tightening their purse strings due to uncertainty about Brexit”.

He added: “Consumers’ confidence already has weakened in recent months due to concerns about the economic outlook and we doubt households are feeling any surer that a no-deal Brexit will be avoided after this week’s political turbulence.”

“Unless the government miraculously manages to force the current withdrawal agreement through parliament soon, growth in consumers’ spending will weaken markedly in the fourth quarter.”

Richard Stables, chief executive of ecommerce comparison service Kelkoo, commented: ?Retail sales have continued to plummet during a difficult Autumn. Former stalwarts of the high street are in sharp decline, with House of Fraser announcing more closures and Debenhams? share price plummeting 21% in just a day; whilst many online players are gobbling up market share.”

“With Black Friday approaching and many of the best value offers available online, many bricks and mortar retailers will be preparing themselves to face more hardships and hope to minimise losses.”

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