November's sales figures, released by the British Retail Consortium this morning, have shown that retailers suffered their biggest annual fall in like-for-like sales since May.
The value of retail sales was 1.6 per cent lower on a like-for-like basis than last year, while the total sales measure was up by 0.7 per cent - which is the weakest annual growth for six months. This is against inflation of five per cent - showing that retail is performing poorly this year.
Stephen Robertson, director general of the BRC, said: "There's a worrying lack of cheer in these figures. The weakest increase in sales for six months suggests consumers are keeping a tight rein on their spending."
He added: "Consumers are not quite in the Christmas mindset yet, although stores are working to generate much-needed sales with high levels of festive discounting."
He went on to point out the weather has had an effect once again: "This November's mild weather contrasted with much lower temperatures last year, hitting sales of winter clothing and footwear particularly hard."
Social shopping search engine Shopow (try saying that in a hurry) believes that online retail is most likely to benefit from any upsurge in sales - and that they're taking even more ground from bricks and mortar stores.
Ellen Flood, Shopow's director, said on BBC Breakfast this morning that, “The peak in online Christmas sales has been brought forward to this week, a whole 21 days earlier than expected. The recession and strong demand from consumers hunting for deals online has lead to an all out price war, with many high street retailers losing their nerve in light of plummeting profit margins. There is a huge concern that they will lose out on business to the online retails as they hunt for deals.
“We are experiencing a huge surge in demand from consumers hunting for deals and bargains on Christmas presents, we expect a record rise in online spend this Christmas forced in part by the recession and by ever tightening purse strings; creating a an all out nation of bargain hunters.”