Signs of a slowdown?
Although the world’s leading brands continue to post record results, is the bubble about to burst as economic factors begin to affect consumer spending? It appears that the answer may be ‘yes’ looking at the latest report released by the British Retail Consortium (BRC).
According to its October retail report, although UK retail sales rose 1% on a like-for-like basis, compared with October 2006, growth was the weakest since the 0.5% reported in November 2006 and was below the average for both 2006 and 2007 as higher energy costs and interest rates and a slower housing market are causing consumers to reel in their spending.
Kevin Hawkins, director general, BRC, commented, “This result reflects the downward trend in sales growth that we have been anticipating as a consequence of higher mortgage interest rates and other pressures on household incomes. It points to some challenging trading conditions for many retailers in the run-up to Christmas, which are likely to persist until interest rates are reduced and consumer confidence begins to improve.”
Other factors, including unseasonably mild weather, have also hit sectors such as clothing and footwear.
