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Tuesday, 6 December 2011

UK November same-store sales decline on mild weather, weak consumer confidence

UK retail sales fell in November as non-food sales sank amid the mild late autumn weather and weak consumer confidence, the British Retail Consortium retail sales survey showed Tuesday.

The BRC said same-store-sales dipped 1.6% on the year in November, the biggest fall since June. That was weaker than the 0.6% decline in October and also the 0.7% increase reported in November 2010, highlighting that uncertainty over the UK economy and the ongoing eurozone debt crisis are weighing more heavily on consumer confidence.

Total sales edged up 0.7% on the year in November but that was down from a 1.5% rise in October and a 2.8% upswing in November last year.

"This November's mild weather contrasted with much lower temperatures last year, hitting sales of winter clothing and footwear particularly hard," said Stephen Robertson, director general of the BRC.

He added that stores were offering plenty of seasonal discounts in the hope that "customers who've managed their finances carefully in recent months will still treat themselves and their families in December, unhampered by the severe weather which disrupted shopping 12 months ago."

Helen Dickinson, head of retail at KPMG which jointly compiles and publishes the monthly survey, said: "Cash-strapped consumers continue to be reticent and last week's gloomy economic forecast by the Chancellor George Osborne won't help to boost confidence levels.”

She added: "Any sales are hard won, with high discount and promotion levels. December will require some tough decisions for a number of retailers."

The survey showed that like-for-like sales of non-food goods fell 2.1% and were 0.5% lower across all stores in November. Clothing sales were impacted by the mild weather and a general lack of confidence on economic prospects. The new wariness seems to be hurting larger homeware and furniture sales most, BRC-KPMG noted.

Food sales were less pessimistic, rising 1.5% in November across like-for-like stores and by 4.6% across all stores covered in the survey.

Confidence in the economy is playing a large part in where consumers feel they get best value for money, according to the survey.

But the BRC's Robertson added that as well as weak sales in stores, non-food, non-store (internet and mail order) retailing was also disappointing in November, despite the many one-day discount events being launched.

"Poor consumer confidence and squeezed disposable incomes are affecting all retail channels," he said.