Christmas may not sparkle for retailers or consumers

Published on Saturday 20 November 2010 22:28

Retailers will struggle to get customers to dip into their wallets this Christmas, experts today warned, as household incomes fell during November.

Rising debt and falling savings meant shoppers had less spare money to spend, particularly on big purchases, pushing the influential Household Finance Index to its lowest level since August.

Research company Markit, which publishes the monthly survey, said 29 per cent of respondents complained that their household finances took a significant turn for the worst this month. Markit economist Tim Moore said: "As Christmas approaches, retailers will cast a nervous eye towards the ongoing weakness in household finances.

"Attitudes towards making major purchases deteriorated substantially in November. This tends to be an accurate advance indicator of wider spending trends, so points to subdued consumer demand in the coming months."

Despite the discouraging results, department store chain John Lewis sounded a brighter note yesterday when it revealed a 12 per cent year-on-year rise in sales in the week to Saturday.

The employee-owned group said sales of clothing and beauty products were strong, with the Kindle electronic book reader and Apple's iPad tablet computer also "flying off the shelves".