Scott Reid's business blog: Break out the bunting. Some good news from the high street.

Published on Thursday 20 November 2008 14:14

If official figures are to be believed, shoppers continued to flex their flexible friends last month.

Analysts forecasting a downturn of half a per cent or more must have choked on their bacon bagels this morning with the news that retail sales were just 0.1 per cent lower in October.

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The government stats coincided with encouraging noises from two of Britain's biggest retailers.

First we had Mothercare reporting a near-doubling in half-year profits, helped by strong growth at its international and online divisions.

In the UK new ranges including a babywear clothing line launched by some celebrity called Myleene Klass (I'm none the wiser) are said to have been a hit with customers.

Encouragingly, the group said it was well placed for Christmas trading.

The word from Halfords was equally bullish today. Despite a slowdown in sales in recent weeks, the car parts and bike chain is confident it can deliver trading profits in line with City hopes.

So all's well in this nation of shopkeepers then?

Er, not quite.

Look at this week's dreary data from the Scottish Retail Consortium. The headline figure may have been within positive territory – with a year-on-year gain of 0.1 per cent – but the underlying picture was far less rosy.

Reporting the largest drop in non-food sales in eight years, the SRC said shoppers were cutting back on spending on everything other than essential items.

Then we had that bellwether of all bellwethers, John Lewis, admitting that its department store sales across the UK had plunged 14 per cent in the seven days to 15 November.

Meanwhile, Marks & Sparks boss Sir Stuart Rose has pointed to the toughest trading environment in his 37 years of retailing.

Returning to those official sales figures, perhaps they should be taken with more than a pinch of salt, contradicting as they do nearly every other piece of evidence coming from the high street.

In September, we had industry experts cast some doubt on the revelation that sales volumes had jumped 1.2 per cent in August.

Regardless, the detail of today's report from the Office for National Statistics may cause alarm.

A 1.1 per cent slide in non-food sales suggests that discretionary spending is taking a hit. Household goods and clothing sales fell by 1.5 and 3.4 per cent respectively.

Clearly, if you've got the dosh, there's never been a better time to bag a bargain.

No need to wait for the traditional New Year sales when the likes of M&S are lobbing a fifth off their prices during an unprecedented pre-festive promotion.

Lower interest rates. Lower inflation. Lower household bills. Now the pre-Christmas sale. And still the tills refuse to ring. Or, if they do, there's little real money to be made.

Cash flow is one thing, but it helps if you can make a profit at the end of the day.