High street hit with sales fall before key Yuletide season

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Christmas is the most important period for retailers (Source: Getty)

The Christmas ads may be out, but retailers won't be celebrating the festive season just yet as figures out today showed the high street suffered a steep decline in sales last month.

In October, sales on the high street fell by 5.2 per cent on a like-for-like basis, the worst performance since April last year, according to figures from accountancy firm BDO.

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Warm weather hit fashion retailers, with sales slumping 7.9 per cent year-on-year. 

Footfall was down in each week of the month, and fell by as much as 2.9 per cent in the final week of October.

BDO said retailers will want to be making up as much ground as possible during the Christmas shopping period.

"The continual pressures on disposable income combined with a drop in consumer confidence have hit sales hard last month," said Sophie Michael, Head of Retail and Wholesale at BDO. "The sharp decline in October sales will no doubt bring anxiety to UK retail in this critical trading period."

The figures come after the British Retail Consortium reported a like-for-like sales drop of one per cent in October. In the same month last year, sales rose 1.7 per cent.

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Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said retail sales were volatile month-on-month but that there were signs consumer spending was slowing, and shoppers will now have to contend with higher interest rates.

"Things look a bit brighter in 2018 but I don't think that we're going to see a return to the strong consumer spending growth we saw before the referendum," he said.

"There is obviously pressure on retailers now to discount."

Hargreaves Lansdown's Laith Khalaf said the poor figures for October were largely due to unseasonably warm weather and that the high street remains under pressure from the growth of online retail.

"It remains to be seen how the festive season goes for retailers," he said. "They can try and cut costs, they can try and engage their supply chain and they can take a hit on margins."