Retailers' fears of a nightmarish festive season were crystallised as a survey revealed that consumers find Christmas shopping a turn-off and are likely to spend no more this year than last.
Of 1,000 consumers polled by ICM exclusively for Retail Week, almost a third agreed they may cut back on spending because of the recent hike in interest rates. Most said Christmas advertising was too much too soon and it got on people's nerves.
Recent shopper traffic figures also confirm that consumers are becoming savvy to retailers holding Sales before Christmas, and prefer to wait until the last minute before buying presents.
Consumer monitor SPSL expects retail traffic to fall by 1.7 per cent year on year in November, before a small revival in December. 'The start of November has been quieter than anticipated,' said SPSL director of knowledge management Dr Tim Denison.
Jittery analysts have issued a raft of downgrades on the back of soft October retail sales and the effect of higher interest rates on the sector. Broker Investec downgraded its stance on French Connection, New Look, House of Fraser and Blacks Leisure on Wednesday.
Principles chief executive Peter Davies said mild weather was deterring people from going shopping. 'I think the general consensus is that it's tough out there,' he said.
House of Fraser remained positive. 'The weather has been a lot milder, but we don't think there's a problem. We're still optimistic about Christmas,' said deputy chief executive David Adams.
- ICM poll: page 12.
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