Shoppers set to open wallets for the festive season, claims survey
A BRIGHTER outlook for the beleaguered high street emerged yesterday in the latest survey from the CBI, indicating that shoppers were ready to open their wallets.
• Shoppers are expected to spend this festive season, according to the CBI
• Consumers have “benefitted from healthy employment growth”
Year-on-year sales volumes growth for November was positive in nine of the 13 retail sectors, while growth in orders placed with suppliers also continued to climb.
Anna Leach, CBI head of economic analysis, said: “This month’s survey is reason to be cheerful as we head into the festive period.”
Howard Archer, chief UK and European economist at IHS Global Insight, said: “Consumers have benefited overall recently from healthy employment growth and a much reduced squeeze in their purchasing power coming from lower inflation and an edging up in earnings growth from their early 2012 lows.”
But the more positive trend coincided with figures from two retail stalwarts which showed that the sector continues to be fragile.
Dixons Retail put a gloss on further losses by claiming the owner of PC World and Currys was well placed to capitalise on the collapse of rival Comet, while B&Q owner, Kingfisher, posted a fall in profits.
Sebastian James, chief executive of Dixons Retail, claimed the group was “outpacing” its competitors and would benefit from Comet sliding into administration. He said trading might be disrupted as Comet completed a “fire-sale” of stock, but after that Currys and PC World were set to win customers.
Dixons had taken on 170 full-time staff from its rival, and a further 1,000 workers for its Christmas trading period, James said.
Underlying pre-tax losses fell to £22.2 million in the 24 weeks to 13 October compared with £25.3m in the same period last year.
Like-for-like sales in the UK and Ireland rose 3 per cent, with television sales jumping as consumers watched the summer of sport.
Dixons’ loss was driven by a poor performance at its French online gadget business PIXmania, as it wrote down the value of the business in the half-year.
Total sales of £1.59 billion were reined in by a quieter August and September as the group ran down stocks of the Windows 7 operating system ahead of Windows 8 being launched in October. James said the tablet would be the big item in the run-up to Christmas, with sales already trebled.
Kingfisher, which also runs Castorama and Brico Depot in France, revealed that its profit fell 6 per cent to £257m in the trading quarter to 27 October, down from £273m last time.
Earnings were impacted by a £16m foreign exchange hit, related to translating euro and Polish zloty overseas profits into sterling.
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Wednesday 19 June 2013
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