After a poor summer, retailers are finally seeing the results of increased consumer spending, according to new research from the British Retail Consortium (BRC).
The organisation said it had been a difficult year for retail, with many consumers taking an increasingly cautious attitude to making expensive purchases following the recent banking crisis. A succession of interest rate rises has also taken its toll, the BRC said.
However, compared to last year, sales in September have risen like-for-like by 3%, showing that despite the difficulties retail is still growing in profitability.
Spending has been encouraged by widespread promotions and price cuts across all retail sectors, persuading consumers to part with their cash, the report found. This has been aided by the sudden onset of colder weather that has drawn people to the shops, helping to increase footwear and clothing sales after a poor July.
Even so, the real test of success will be at Christmas, said Helen Dickinson, head of retail at KPMG.
“There is no doubt that Christmas will be challenging for many retailers, as the low growth backdrop looks set to continue,” she said. “However, for the moment at least, consumer spending patterns are not being affected by the wider credit crunch issues.”
© Crimson Business Ltd. 2007
