"Our data makes for rather frightening reading for retailers this Halloween. After several months of positive momentum, October has brought a sharp reminder of how fragile consumer confidence remains. As we predicted last month, shoppers are still haunted by high inflation, particularly on food, while uncertainty about their household finances is keeping a firm grip on discretionary spending. Consumers are being highly selective and many are prioritising spending on essentials and experiences rather than non-essential goods."
"The timing of this year's Autumn Budget, just two days before Black Friday, adds another layer of pressure. Retailers are being forced to make critical investment and promotional decisions without a clear view of the fiscal landscape. After a disappointing October, we expect to see earlier and more prolonged discounting to stimulate demand. But that strategy has its risks. Heavy discounting too soon erodes margins and leave businesses"
Retailers entered the Golden Quarter on shaky ground as high inflation and weak consumer confidence weighed on October sales. Total like-for-like discretionary sales were broadly flat, slipping -0.02% and ending a four-month run of positive results. Store sales rose 1.1%, outperforming online for a second consecutive month. Weekly data for the four weeks to 26 October showed an uneven month, with mid-month strengthening but declines in the first and final weeks. The final week coincided with school half-term and saw declines as families prioritised experiences and travel over retail. Autumn Budget timing before Black Friday adds pressure and raises prospects of earlier, prolonged discounting and margin risk.
Read at London Business News | Londonlovesbusiness.com
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