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October UK retail sales fall 0.1% October UK retail sales fall 0.1%
(9 minutes later)
Sales on the UK's high streets fell by 0.1% in October, lower than expected, Office for National Statistics data showed. Sales on the UK's high streets fell by a lower-than-expected 0.1% in October, figures from the Office for National Statistics have shown.
The decline was much less than the 0.9% drop that most analysts had expected after sales fell by 0.4% in September. The decline was much less than the 0.9% drop that analysts had predicted after sales fell by 0.4% in September.
Retail sales grew at an annual rate of 1.9% compared with 1.7% in September.Retail sales grew at an annual rate of 1.9% compared with 1.7% in September.
Many retailers have opted to hold pre-Christmas sales in a bid to boost spending at what should be their busiest time of year.Many retailers have opted to hold pre-Christmas sales in a bid to boost spending at what should be their busiest time of year.
Marks and Spencer is cutting all prices by 20% for one day only on Thursday. Food sales rose 1% in October, but non-food sales fell 1.1%. Sales of household goods were down 1.5% and clothing sales fell 3.4%.
"The drop in non-food sales clearly suggests that discretionary spending is taking a hit," said Vicky Redwood at Capital Economics.
Discount day
Marks and Spencer is cutting prices in its clothing and homeware departments by 20% for one day only on Thursday, its first one-day sale for four years.
"The customer is not conditioned to expect M&S to do these things very often," retail analyst Fraser Ramzan, of Nomura, said.
Some M&S stores will stay open until midnight for the discount day.Some M&S stores will stay open until midnight for the discount day.
Woolworths is reportedly in talks to sell its branches for a pound
But Mr Ramzan said there was a danger that shoppers would only buy reduced items that they would have bought anyway at full price, thereby cutting into, rather than boosting profits.
On Wednesday, Arcadia Group announced sales at Dorothy Perkins, Wallis, Evans and Burtons, and Debenhams is also holding a three-day 25% off "spectacular".On Wednesday, Arcadia Group announced sales at Dorothy Perkins, Wallis, Evans and Burtons, and Debenhams is also holding a three-day 25% off "spectacular".
Heavy losses Marks & Spencer saw like-for-like sales fall 6.1% in the 13 weeks to 27 September, while Arcadia experienced a 2.8% drop from 2007.
Retail analyst Fraser Ramzan, of Nomura, said the rarity of the M&S sale day might persuade some people to do their Christmas shopping early.
"The customer is not conditioned to expect M&S to do these things very often," he said.
"Because M&S generally does hold its nerve until Boxing Day, people won't expect them to do this again before Christmas."
But he said there was a danger that shoppers would only buy reduced items that they would have bought anyway at full price, thereby cutting into, rather than boosting profits.
Marks & Spencer saw like-for-like sales fall 6.1% in the 13 weeks to 27 September, while Arcadia experienced a 2.8% drop from 2007. The government has slashed interest rates in a bid to boost spending
Woolworths has suffered particularly heavy losses and is reportedly in talks to sell its chain of more than 800 stores for a nominal price of one pound.Woolworths has suffered particularly heavy losses and is reportedly in talks to sell its chain of more than 800 stores for a nominal price of one pound.
Paul McGowan, chief executive of restructuring specialist Hilco, said on Wednesday that talks with Woolworths were at a "very early stage".Paul McGowan, chief executive of restructuring specialist Hilco, said on Wednesday that talks with Woolworths were at a "very early stage".
Woolworths posted a record first-half pretax loss of £90.8m in September. In September, Woolworths reported a record first-half pre-tax loss of £90.8m.
Interest ratesInterest rates
Earlier this month, the government cut interest rates by 1.5% in the hope of putting more money in consumers' pockets and encouraging them to spend.Earlier this month, the government cut interest rates by 1.5% in the hope of putting more money in consumers' pockets and encouraging them to spend.
However, some analysts say that any positive effect - if it comes at all - will be too late to boost sales in the run-up to Christmas.However, some analysts say that any positive effect - if it comes at all - will be too late to boost sales in the run-up to Christmas.
Rising unemployment has also dented consumer confidence.Rising unemployment has also dented consumer confidence.