Spending data for October point to a rather subdued start of the ”golden quarter” for retailer profits after shoppers stayed away from high street stores in UK and spending fell at its fastest rate in just over four years.
According to commentators, the popularity of Black Friday and Cyber Monday sales in recent years might not be enough to revive spending with consumers becoming ”immune” to early sales, even as shop owners roll out promotions.
The number of people hitting the high streets was down by 2 per cent in October, as against the year before. This marked the steepest year-on-year drop since the EU referendum when footfall fell by 2.3 per cent, according to data from Springboard.
The picture was even bleaker in terms of overall spending as the Visa Consumer Spending index revealed that the October spending slide of 2 per cent is the quickest seen since Sept 2013.
Sluggish wage growth and a return to increasing interest rates has hit consumer confidence.
Although it is believed that warmer weather played a part in weak October sales, according to experts, the slump points to deeper concerns over consumer confidence which could leave retailers out in the cold this Christmas.
According to Mark Antipof, Visa’s chief commercial officer, the crucial pre-Christmas trading season got off to a poor start, as households suffer financial strain.
”The unseasonably warm weather did not help, but the clothing sector has been struggling to increase sales since the beginning of this year. This is reflected more broadly in high street performance, with spending falling for the sixth month in a row,” Antipof said, The Guardian reported.
According to Visa, the poor performance was partly due to the drop in real wages in recent months, as pay rises have failed to keep up with inflation adding, that the slowdown in growth this year, and Brexit uncertainty, were also gnawing at consumer confidence.