The writing was on the wall two weeks ago when retail employment tumbled along with CBI-reported retail sales, but tonight’s BDO High Street Sales Tracker should be the icing on the cake for any looming rate hike as like-for-like sales crashed 5.2% – describe by BDO as “the most horrific” October on record.
It was the worst month since right before Brexit in April 2016.
Consumers resisted spending in October following the rise of the Consumer Price Index (CPI) to 3% in September. Recent confidence barometers have also suggested a creeping decline in economic and spending confidence amongst consumers.
As wage increases continue to be outstripped by higher inflation, and with the (now real) anticipation of higher mortgage payments, then it comes as little surprise that people are tightening their belts prior to the anticipated Christmas expenditure.
Fashion sales plunged 7.9% YoY and were the wost segment, but retailers aren’t alone; restaurant, pub and bar groups “also feeling the pinch” in recent weeks.
Rain Newton-Smith, CBI Chief Economist, blamed the weakness on higher inflation.
“It’s clear retailers are beginning to really feel the pinch from higher inflation. While retail sales can be volatile from month to month, the steep drop in sales in October echoes other recent data pointing to a marked softening in consumer demand.”
writing was on the wall two weeks ago when retail employment tumbled along with CBI-reported retail sales, as the British Retail Consortium reported that retail employment dropped at the fastest rate since 2008.
From The Independent, UK retailers cut jobs over the past three months at the fastest rate since comparable records began in 2008, due to technological change and rising employment costs, the British Retail Consortium said on Thursday.
The BRC, which represents major retailers, said its members employed 3.0 per cent fewer staff in the third quarter of this year than during the same time in 2016, and total hours worked fell by 4.2 per cent year-on-year.
