Discounts fail to tempt shoppers

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Discounts might be aplenty on the high street but the latest figures show retail sales have fallen for consecutive months the first time in nearly 14 years.

The British Retail Consortium (BRC) says food and non-food sales were down 2.6% in November since the same time last year, when they actually rose 12%. October also saw a fall in sales, making 2008 the first time sales have declined for two consecutive months since the survey began in January 1995.

The fall in sales might have been even greater if it hadn’t been for the food and drink sector, which saw purchases actually increase compared to November 2007.

Despite extensive heavy discounting, clothing and footwear, furniture and big-ticket homeware sales were all down over the year. The BRC says the discounts and promotions taking over the high street have, so far, failed to tempt customers unless they offered real value or were attached to much-needed products.

Stephen Robertson, director general of the British Retail Consortium, says: “The numbers speak for themselves – these are clearly tough times. In the 14 years of this survey we have never recorded two consecutive months of total sales falls. Like-for-like sales have now fallen in eight out of the last nine months. All sectors are down apart from food and drink.”

It is now hoped that the run-up to the Christmas period, as well as even more discounts and sales, might reverse this trend especially as VAT has now been cut by 2.5% and interest rates have fallen.

"Retailers will be hoping that customers have been putting off Christmas shopping - not cancelling it,” Robertson adds. “With money tight at the moment shoppers can take advantage of the extraordinary levels of deals, offers and promotions. The recent VAT and interest rate cuts may also provide some stimulation.”

In the last three weeks alone there has been a significant increase in the number of discounts and promotions on the high street as retailers try and convince shoppers to part with their cash. But Helen Dickinson, head of retail at KPMG, says this might not be enough.

“We are seeing a huge variation in how effective this is proving to be for individual retailers, which just highlights how volatile and challenging the market currently is,” she explains.

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