As consumers tightened their belts in the face of rising inflation, British retailers experienced the slowest growth in sales since the end of COVID-19 lockdowns last year, according to business consultancy BDO.
Online sales decreased by 0.6% in August, marking their first decrease since March, while total like-for-like retail sales increased by 3.6% in comparison to the same month last year.
"September's results will show just how significant the pull-back in discretionary spending is likely to be this winter but clearly these results in August show that consumers are cutting their budgets," BDO Head of Retail Sophie Michael said.
"Consumers are deferring the purchase of big ticket items as households prioritise essential spend," Michael said.
Ahead of the fall and holiday seasons, she said, slower sales growth for fashion and lifestyle items was concerning.
Britain's high inflation rate, which reached 10.1% in July, is expected to slow down, according to economists, after new Prime Minister Liz Truss unveiled a plan on Thursday to limit skyrocketing household energy prices.
In line with the above details, major UK fashion retailer ASOS said that it anticipates that the profits for the full year will be close to the bottom of its guidance following weaker sales that was projected for August.
"Having seen good growth in June and July, sales in August were weaker than anticipated," it said. "This reflected the impact of accelerating inflationary pressures on consumers and a slow start to Autumn/Winter shopping."
The owner of the competitor Primark had issued a warning on Thursday, stating that lower disposable income from customers and higher costs would reduce the company's profit margin in the upcoming fiscal year. Early deals showed that ASOS shares, which have fallen 78 per cent over the last 12 months, were trading 0.5 per cent higher.
Sales in constant currency for the year ending on August 31 would increase by about 2%, according to the company, while net debt would be about 150 million pounds ($174 million), both figures falling short of expectations and company guidance.
It predicted a full-year adjusted pretax profit of between 20 and 60 million pounds in June.
(Source:www.businesstimes.com.sg)
Online sales decreased by 0.6% in August, marking their first decrease since March, while total like-for-like retail sales increased by 3.6% in comparison to the same month last year.
"September's results will show just how significant the pull-back in discretionary spending is likely to be this winter but clearly these results in August show that consumers are cutting their budgets," BDO Head of Retail Sophie Michael said.
"Consumers are deferring the purchase of big ticket items as households prioritise essential spend," Michael said.
Ahead of the fall and holiday seasons, she said, slower sales growth for fashion and lifestyle items was concerning.
Britain's high inflation rate, which reached 10.1% in July, is expected to slow down, according to economists, after new Prime Minister Liz Truss unveiled a plan on Thursday to limit skyrocketing household energy prices.
In line with the above details, major UK fashion retailer ASOS said that it anticipates that the profits for the full year will be close to the bottom of its guidance following weaker sales that was projected for August.
"Having seen good growth in June and July, sales in August were weaker than anticipated," it said. "This reflected the impact of accelerating inflationary pressures on consumers and a slow start to Autumn/Winter shopping."
The owner of the competitor Primark had issued a warning on Thursday, stating that lower disposable income from customers and higher costs would reduce the company's profit margin in the upcoming fiscal year. Early deals showed that ASOS shares, which have fallen 78 per cent over the last 12 months, were trading 0.5 per cent higher.
Sales in constant currency for the year ending on August 31 would increase by about 2%, according to the company, while net debt would be about 150 million pounds ($174 million), both figures falling short of expectations and company guidance.
It predicted a full-year adjusted pretax profit of between 20 and 60 million pounds in June.
(Source:www.businesstimes.com.sg)
Homepage
Send to a friend
Printable version
Share
