newsonretail.com - Festive Season Brought Positive Movement in the UK Retail Sales

Festive Season Brought Positive Movement in the UK Retail Sales

Tuesday, 15 January 2008

Despite the downfall in housing industry and rise in the interest rates, the UK retail sales witnessed significant rise in November 2007, thanks to the then impending festive season.

The British Retail Consortium (BRC) said that UK retail sales jumped by 1.2% in the month of November 2007 in comparison to the same month in previous year (2006). The retail sales had also risen by 1% in October 2007 as compared to the sales recorded in October 2006, as reported by Nebusiness.

The biggest part of this sale came in the fourth week of November when people increasingly shopped for Christmas. To some extent, companies too are responsible for this modest growth as they offered great discounts on purchases. The Bank of England said that heavy discounts offered by retail companies might have encouraged consumers to spend.

In the month of August 2007, the UK retail sales dwindled due to increase in the interest rate that put extra pressure on disposable income of people. Another factor that contributed in the decline of retail sales is strong measures taken by consumer credit supplier in order to reduce their risk. The negative impact of these measures reflected in the form of reduced customer loan acceptance rate and falls in high value purchases by customers.

Various strategies had been made by banks (including reduced interest rates) so that people have easy access to credit to spend on shopping. The government too has been trying to back the retail sales through its various plans like creating job opportunities and increasing wages. Online shoppers too contributed to this growth significantly.

Industry experts opined that the consumer spending in the weeks to come prove to be a major factor in determining how fast and how much can the Bank of England further curtail the interest rate.

According to a Senior Research Analyst at RNCOS, “The retail industry in the UK was going through a difficult phase due to low consumer interest from the very beginning of 2007. The decline in housing industry and phenomenal increase in the interest rate are the contributing factors. Nevertheless, but the festival season infused a fresh sense of life into the UK retail industry due to improvement in sales figures as more and more people were indulged in purchasing.”

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