Festive fears for Q4 trading
Consumer spending in furnishing stores has been falling in the all-important Q4 trading season with Barclaycard recording a 7.1% decline on last month.
According to the latest Barclays Consumer Spending Index, which includes both debit and credit cards, retail spending on furnishing was also down 4.5% compared to this time last year.
Based on card transactions, these figures are based on value so the persistently high inflation in flooring. especially in carpets, implies that volumes are event more suppressed.
The data aligns with anecdotal comment in the flooring industry of sluggish sales in September and October.
Esme Harwood, Director at Barclays, said: “Brits cut back on non-essential categories in October, as thoughts turned to saving for Christmas and budgeting for winter fuel bills."
This analysis is backed up by today's report from the BRC-KPMG Retail Sales Monitor for October 2023 which saw non-food sales decrease 1.0% on a total basis over the three-months to October.
Paul Martin, UK Head of Retail, KPMG, said: There is no doubt that the last 12 months have taken a toll on confidence and their ability to spend. Coupled with a higher interest rate environment, dwindling covid savings and the heating coming back on, beleaguered consumers are thinking very carefully about how they spend their money.
"With spending levels expected to be much more muted this year, the run up to Christmas could be the most challenging we’ve seen since pre-pandemic days,” he said.
One flooring industry leader suggested to us that while the pre-Christmas consumer reluctantance would continue to depress sales in November, the Boxing Day and New Year sales could be all-important as those consumers who needed floorcovering came back into the market looking for lower prices.
