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October UK retail sales fall 0.1% | October UK retail sales fall 0.1% |
(20 minutes later) | |
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. | 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 analysts had predicted 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. |
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%. | 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. | "The drop in non-food sales clearly suggests that discretionary spending is taking a hit," said Vicky Redwood at Capital Economics. |
Discount day | 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. | 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. | "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 | 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. | 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. |
Other retailers, including Dorothy Perkins, Burtons, Debenhams, Selfridges and John Lewis, are also cutting prices for short periods of up to several days. | |
Retailers under pressure | |
Marks & Spencer saw like-for-like sales fall 6.1% in the 13 weeks to 27 September, while Arcadia Group, the owner of such retailers as Topshop, Dorothy Perkins and Burtons, experienced a 2.8% drop from 2007. | |
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". |
In September, Woolworths reported a record first-half pre-tax loss of £90.8m. | In September, Woolworths reported a record first-half pre-tax loss of £90.8m. |
Earlier this month, the government cut interest rates to 3% from 4.5% 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. |