Retailers heading for an austere Christmas, says PwC
Retailers in the Midlands are planning for a cautious Christmas, according to PricewaterhouseCoopers (PwC). Experts say it is a case of “once bitten, twice shy” for the retail industry in the run up to the festive season after many outlets were left with a surplus of goods in 2008.
Businesses then stocked more conservatively the year after which Andy Lyon, retail expert at PwC, said “paid off with an improvement in profitability”.
Despite reports of an increase in like-for-like sales in June, PwC says that concern about house prices and the impact of public spending cuts has forced retailers to prepare for a slower festive season.
Lyon said: “Consumers are getting a lot of mixed messages about the economy and they are concerned about spending cuts and possible house price movements. In such conditions, they are unlikely to increase their spending in the run up to Christmas and retailers will be forced to plan accordingly.
“We are heading for an austere Christmas. However, there will be pockets of strong retail performance as consumers continue to look for value for money by either shopping at value stores or by selecting from value ranges.”
However, the company said that some consumers could be tempted to spend more on big ticket items such as furniture, TVs and cars in the run-up to Christmas, due to the 2.5 per cent rise in VAT rise which will be implemented in January 2011.
