Unfortunately, the retail sector has once again been the receiver of bad news. Despite an uplift in wage growth and record-low unemployment, retailers are still struggling to gauge consumer interest. Brexit uncertainty is still dominating people’s thoughts, leading to stunted consumer spending and penny-pinching behaviour. Other factors such as the rising popularity of e-commerce, are also changing the way consumers spend their money.
New figures from the British Retail Consortium and KPMG have shown that sales fell last month by 0.2 per cent. According to the report, non-food items declined by 2.7 per cent compared with the year before, while food sales increased by 3.4 per cent. This contrast between “essential” and recreational spending highlights the reluctance of consumers to spend lavishly.
The administration of Coast is a prime example of the shifting priorities of consumers. While budget clothing retailers like Primark are still holding strong, consumers are not willing to loosen their purse strings for the bigger price tags. Coast, in particular, is a rather specific brand, with its focus on occasion-wear not appealing to the cost-conscious general public.
In contrast to brick and mortar stores, the e-commerce environment is faring better. Clothing sales increased, with online retailers managing to grab the attention from online browsers.
Unsurprisingly, Christmas is expected to be a mild affair, with a separate survey from Barclaycard predicting a spending slowdown during the festive season. According to these figures, consumers are already planning on spending less, with 45 per cent not confident about spending money on “nice-to-have” items during the holiday.