Retailers in Yorkshire will be hoping for a late surge in consumer confidence to change their fortunes this Christmas, but may have to wait until next year, according to retail experts at accountants and business advisers PwC.
Retail sales dipped by 1.1 per cent in October – the slowest rate of growth for almost a year - and online sales weren’t immune from the fall.
Andy Ward, managing partner at PwC in Sheffield, said: “Despite the gloomy data, some retailers are claiming that consumers’ willingness to spend appears to be picking up.
“Indeed, some have noted Halloween sales have been their strongest ever.
“At the big ticket end, sales of new cars in October were up 12 per cent on the same month last year – a big increase.
“However, this probably disguises a trend away from big ticket items towards gifts and smaller treats or ‘feelgood’ purchases.”
Mr Ward said PwC’s latest report on the UK economic outlook forecasts that consumer spending is set to pick up in 2013.
This is largely in response to the current low level of inflation, which, while rising slightly in the short term due to rising energy and food prices, is predicted to fall back towards the Bank of England’s target of two per cent later next year.
“Of course, we can’t be sure that the increase in consumer spending will come in time to boost Christmas trading – retailers may have to wait until next year,” said Mr Ward.
“However, retailers are definitely in a much better position than they were this time last year – with less inventory due to more cautious buying earlier in the year.
“This will result in less discounting activity in the run-up to Christmas and should help to protect margins and drive profitability over the festive season.”
Mr Ward believes the dip in growth of online sales in October was a blip.
“Online sales have been increasing exponentially year-on-year and we are expecting this to continue.
“Retailers in the region know that to survive and thrive they need to have a strong online presence and many have also had to rethink their strategic offering completely in order to adapt to current shopping trends.
“Retail apps are likely to become even more prevalent this year, as retailers reach out to consumers in a more personalised and direct way.”