British retailers expect subdued build-up to Christmas amid freezing weather and strikes | Merchandise trade

UK retail is braced for a muted end to the Christmas shopping period as bad weather and strikes weigh on consumers already under pressure from rising living costs.

Analysts at data firm Springboard said they expected footfall at retail destinations across the UK to increase by 4.5% in high streets, 5% in retail parks and 10% in shopping centers in December compared with November. However, these number of increases will be smaller than in previous years.

UK retailers have already reported lower-than-expected pre-Christmas sales. On Friday, figures from the Office for National Statistics showed that the amount spent on UK retail fell by 0.4% in November, against a forecast of a 0.3% rise by industry analysts.

Prospects for an acceleration in sales during December to make up for lost ground were likely to be hampered by a cold spell and a series of rail strikes in the UK last week. Further strikes are planned, including one by Network Rail staff starting at 6pm on Christmas Eve.

Some online stores are also likely to be hit by strikes, with 115,000 Royal Mail workers due to start a two-day strike over pay, jobs and conditions on Friday, running into Christmas Eve.

Samuel Tombs, UK chief economist at Pantheon Macroeconomics, a consultancy, said the November sell-off came as “consumers tightened their belts in the face of rising prices”.

“We expect further weakness going forward due to the snow and a further hit to real incomes,” he added, with higher energy costs a major factor in reducing household disposable incomes.

Amarveer Singh and Maria Nurgaziyeva, analysts at Creditsights, a credit rating agency, wrote: “December should see more support from Christmas shopping for both food and non-food retail, although cold weather and ongoing rail strikes are expected to put a dent in that.”

Inflation has meant that consumers get less for their money. Singh and Nurgaziyeva said November sales in sterling terms were up 14% compared to February 2020 – before the first UK pandemic shutdown – but the volume of goods sold was 0.7% lower.

Helen Dickinson, chief executive of the British Retail Consortium, said: “Despite huge cost pressures, retailers are doing everything they can to keep prices affordable for all their customers. But the cost of living crisis means many families may have to scale back their festive plans.”

Diane Wehrle, the insights director at Springboard, said the Christmas increase would be “more subdued than previous years”.

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