New figures from the Office for National Statistics (ONS) paint an unrealistically positive picture of the situation in the retail sector, it has been argued.
Data for October has indicated that the volume of sales in the three months to November rose by 0.7 per cent compared to the previous three months.
But such an apparently positive picture simply cannot be accurate, according to British Retail Consortium (BRC) director general Stephen Robertson.
He said: “These ONS figures seem to fly in the face of retailers’ experiences on the streets. The evidence we’re receiving suggests consumers have approached this Christmas with great caution, reining in their spending in November and leaving it late to start their Christmas shopping.”
And, he added, sales in November were barely any better than a year ago, noting that wherever sales are high it is often through significant discounting as stores fight their rivals for every last pound in the tough trading environment.
In such a situation, the bleaker prospect of those who lose out in this battle having to seek bankruptcy advice looms larger and this was highlighted by Frances Coulson, the president of insolvency practitioners‘ body R3.
She noted that shop prices have increased by 3.6 per cent over the past year, meaning the value of sales has fallen.
And research by R3 has shown that 41 per cent of retailers are concerned about their debt levels, while 58 per cent have seen a fall in profits.
Such factors may suggest a large number of stores could be in trouble if the Christmas period turns out to be a weak one for them.
With the possibility of bad weather and a post-Christmas slump in spending, Ms Coulson warned retailers not to be complacent.
She advised: “The sooner any troubled business seeks professional advice, the more that can be done.”