Shoppers brave the floods

Retailers predict good sales in the run-up to Christmas

UK shoppers headed for the High Streets in large numbers in October, braving the rain, floods and ignoring the sporadic petrol shortages.

The breakdown of figures showed non-food did reasonably well - maybe there were a lot of wellies, raincoats and umbrellas bought

Ross Walker
Royal Bank of Scotland

Retail sales during the month - the wettest since 1903 - were the same as in September.

Compared to a year earlier, spending rose by 3.8%, according to data from the Office for National Statistics.

"The breakdown of figures showed non-food did reasonably well - maybe there were a lot of wellies, raincoats and umbrellas bought," Ross Walker, UK economist at The Royal Bank of Scotland quipped.

Analysts were surprised. They had predicted lower figures.

City expectations had been for a fall of 0.4% on the month and a rise of 3.7% on the year.

The figures are boding well for a strong performance this Christmas

Patrick Browne
Scottish Retail Consortium

"We thought there would be more impact from flooding and fuel protests," Walker said.

The release of the UK retail sales statistics failed to move the markets.

Gilts, interest rate futures and the pound remained static while London's key share index, the FTSE 100, nudged slightly higher.

Hot Christmas

October's growth figures were the weakest since February, but retailers say they are not concerned about that. They believe shoppers are holding back, getting ready for a massive seasonal spending spree.

Steady spending during October, despite the bad weather

In Scotland, where shoppers tightened their purses even more than in the UK as a whole during October, the sluggish sales growth was even seen as a good sign by the Scottish Retail Consortium.

"The figures are boding well for a strong performance this Christmas," said Patrick Browne, director of the consortium.

Total monthly sales in Scotland rose by 3.6% compared to October 1999 according to figures released Wednesday by the Royal Bank of Scotland and the Scottish Retail Consortium.

Virtual Christmas

In the world of virtual shops, the hope is that much of the Christmas spending will go to online retailers. One company selling goods over the internet has even commissioned a Mori survey to prove the obvious, that real-world Christmas shopping is stressful.

"Online shopping provides a welcome release from the crowds and the long queues and has the added advantage of providing shoppers with convenience and the best prices without sacrificing quality," said Ehud Furman, managing director of the company, DealTime.co.uk.

Internet shopping will almost certainly be a hit this year. Indeed, a year ago e-commerce revenue quadrupled during the festive shopping season of 1999, according to a survey by Boston Consulting Group.

But traditional High Street retailers who also sell over the web are expected to be the winners over the next few weeks.