Yahoo Finance British high street braces for a ‘Christmas of constraint’
The high street’s hope for a bumper Black Friday might not be enough to rescue pre-Christmas trading after a dismal start to its end of year sales.
Gloomy spending data for October has already taken the shine off the start of the “golden quarter” for retailer profits after shoppers stayed away from high street stores and spending fell at its fastest rate in just over four years.
Even the popularity of Black Friday and Cyber Monday sales in recent years might not be enough to resuscitate spending as consumers are becoming “immune” to early sales, with promotions already on offer.
In October, the number of people hitting the high streets fell by 2pc compared to the year before. This marks the steepest year-on-year drop since the EU referendum when footfall slumped by 2.3pc, according to data from Springboard.
In terms of overall spending, the picture was even bleaker. The Visa Consumer Spending index has revealed that the October spending slide of 2pc is the quickest seen since Sept 2013.
Although warmer weather is believed to have played a part in weak October sales, experts say the slump points to deeper concerns over consumer confidence which could leave retailers out in the cold this Christmas.
Diane Wehrle, from Springboard, said a “Christmas of constraint” could be on the cards after a perfect storm of confidence-denting pressures on consumer spending, including sluggish wage growth and the recent rise in interest rates.
“It might not have been a very big interest hike but for many it was the first time it has happened – so it was still a bit of a shock culturally,” she said.
Mark Antipof, from Visa, added: “The [October] figures are a stark indicator of the strain on household budgets even before the Bank of England’s recent interest rate rise.”
Ms Werle said it is too soon to say whether the Black Friday weekend will be enough to rescue retailers from multiyear Christmas spending lows.
