Following the fall in high street sales during the summer months, retailers are now looking to Christmas to provide the turnaround which is greatly needed. The reduction in sales during July, August and September combined with the riots of August have led to UK retailers suffering huge losses. Figures provided by the Office for National Statistics show that sales had increased in value during the three months to September by 5.4 percent. However, only 0.6 percent was due to the volume of sales.
The official figures left retailers concerned, with Argos profits crashing by 94 percent. According to the director general of the British Retail Consortium, Stephen Robertson Christmas will be a critical period for retailers this year. The ONS said that the small increase in sales was likely to be down to increased sales of laptops at the beginning of the school year, plus new releases of video games. As the end of the summer saw a spell of unusually warm weather, sales of autumn clothing dropped.
Consumer spending is responsible for two thirds of GDP, but as inflation reached 5.2 percent in September, households are feeling the pressure and spending less. Inflation has grown faster than the average wage and unemployment has reached its highest point in 17 years. Companies are loathed to start hiring people again, as credit condition making borrowing much harder for small business, affecting long term business growth.
According to trade unions, the austerity measures introduced by the government are working against them. Brendan Barber, the general secretary of the TUC said:
“Getting people back into work is the only way to get consumers spending again, business growing and the deficit down.”
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