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Cautious Consumers causes Lowest Retail Sales

Cautious Consumers causes Lowest Retail Sales

As the buyers remain ‘cautious’ this year, retail sales drops to its lowest level. In September, the retail industry suffered the worst monthly sales performance of the year. As a result, market experts are advising retailers to carefully manage their promotional activities before the beginning of Christmas sales period.

Reports from KPMG and the British Retail Consortium revealed that the like-for-like retail sales in UK increased only 0.7 percent last month in comparison to the figure a year ago. Sectors like clothing, furniture, food and many others are experiencing sales declines. Apart from the Easter distortions, September marks the slowest rate of retail sales growth this year.

Though some of the retail sectors like electrical and leisure goods saw a growth in sales, KPMG warns the retailers about the cautious behavior of the consumers prior to the crucial Christmas period. And all these figures can be the reason of concern for the retailers despite the fact that the economy in UK is recovering and sectors like construction, manufacturing and other services are seeing considerable improvements.

KPMG’s head of retail David McCorquodale says, “These figures are a reality check and will make retailers nervous as we enter the run up to Christmas. Consumers are still cautious about spending.” He further added that since retailers are carrying less stock now, they must carefully manage the promotional deals and offers for boosting sales in order to maintain margins. The UK managing director at Procter & Gamble, Irwin Lee has also advised the retailers to avoid using unsustainable value giveaways to boost sales. Lee spoke about this at the IDC conference which took place in London and he also advised retailers to focus on value creation instead.

Lee added, “Our focus is on value creation to complement, if not offset, the over-reliance eon unsustainable value give away. There is nothing proprietary in price promotions. We believe promotions win quarters, but true innovation wins decades.”

On the other hand, online sales (both ecommerce and m-commerce) saw a double-digit growth last month, which compensated for the sales drops on the high street.

Image Source – 1md.com.au

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