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Retailers suffer as Britons feel the squeeze

DECLINE: New Look

FEARS OVER crumbling consumer confidence emerged today (June 6) as retailers warn of pressure on sales just two days ahead of the general election.

Online white goods seller AO World warned of a “significant” slowdown in the UK in its first quarter partly driven by a faltering housing market and rising inflation following the pound’s post-referendum slump.

“The secondary housing market, people moving and swapping houses, is slow. We think that’s a sign of caution,” chief executive Steve Caunce said.

Caunce added that in his 12 years at AO, which sells mostly imported goods, he had “never seen price increases of this magnitude so quickly”. AO, which reported a 17% rise in full-year sales to £701.2 million but widening losses, sank 9p, or more than 6%, to 136p.

Meanwhile, high street brand New Look reported a 6.6% drop in its UK same-store sales. Boss Anders Kristiansen said Brexit has caused a “distraction” that contributed to the “very, very, very soft” clothing market in the last year. New Look sales would probably fall again this year, he said.

The comments came as data showed a dip in retail sales in May. Sales were down 0.4% last month, according to the figures from the British Retail Consortium and KPMG, while online sales growth was just 4.3% versus last year’s 13.7% rise. The cost of living is at a four-year high of 2.7% and outstripping growth in salaries for the first time since 2014.

Retailers, including Next and Debenhams, have also flagged the impact of a shift in spending away from clothes towards dining out, travel and experiences.

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