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Associate Article

Retailers worried about tough Christmas

It’s no secret that UK retailers depend greatly on the festive season. Over 60 per cent of the annual turnover is taken between November and January, making it a hectic three months of massive sales and busy high streets. Sales of Christmas related goods are set to reach £12 billion this year, 5 per cent more than in 2006, with each person set to spend an average of £435 on Christmas gifts. However, long term growth on the high street points to a slowdown after the three month trend rate of growth fell to 1.8 per cent from 2.0 per cent in October for like for like sales.

There were slight increases in November, but these were disappointing results when compared to the rest of the year. Helen Dickinson, head of retail at KPMG, said that the figures ‘will not be the result that many retailers were hoping for. November has historically been a poor month for trading, and this month doesn’t seem to have changed that trend.’

A number of retailers have warned of slowing sales in the run up to Christmas, hinting that the industry could be facing its toughest winter in years. JD Sports announced on 3rd December that like for like sales had slowed significantly in October and November after a previous double digit period of growth in the summer. Recent developments from rising interest rates to the tales of woe pronounced from the credit crunch have done much to knock consumer confidence. In a recent report, the British Retail Council noted, ‘Consumers are particularly cautious about making major purchases.’

One retailer to buck the trend is supermarket giant Tesco, who saw its third quarter sales up 4.8 per cent from 2.7 per cent in the first half of 2007. The rising cost of foodstuffs, however, has had an inflationary role to play on this as supermarkets have had to increase prices. Christmas is likely to see particular growth in sales for the supermarkets due to the sheer range of Christmas orientated products that they sell, with an estimated 7 per cent rise in both turkey sales and brussel sprouts sales on 2006. Despite this, Kevin Hawkins, Director General of the BRC has noted, ‘growth this year is likely to be driven by discounting. If retailers do see a boom this Christmas, it will be followed by a slump in spending, as consumers really start to feel the pinch and tighten their belts.’

There are plenty of ways to save this Christmas, but if you intend to get credit and spend plenty in a supermarket then ASDA Finance are offering a 0 per cent credit card that has a handy debt consolidation option. From 26th December through to the 22nd January they are offering a balance transfer refund. Transferring a balance of £3000 could get you £75 off in ASDA vouchers; the card also has 0 per cent on balance transfers for the first nine months. ASDA Finance additionally offers a number of other financial services, including personal loans, to help with Christmas debt consolidation.





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