- Retail sales set to drop as consumers spend less and save more
- Big-ticket purchases have declined as shoppers turn to ‘little luxuries’
Christmas adverts have appeared on screens, and the shops are filling with festive offers: but is it all to no avail? Paul Martin, head of retail at KPMG, notes that this year, as is so often the case, “the health of the industry is at the mercy of macro demand” – and the signs are pointing to a challenging Christmas.
Retailers have had a better year than expected, and this month alone the likes of Next (NXT), Marks & Spencer (MKS) and B&M European Value Retail (BME) have all raised full-year guidance. But there is still concern that the overall picture is darkening. According to Office for National Statistics (ONS) data, retail sales volumes declined by 0.8 per cent in the third quarter, having grown modestly over the first half of the year. The figures suggest that rising interest rates are taking a toll, not least by subduing the housing market and depressing demand for all the things that people buy for a new home. Last month, household goods sales slumped by 2.3 per cent, with the drop driven by falls in furniture and lighting stores.