Cautious Christmas for UK retailers

UK shops have begun planning ahead for a cautious Christmas, retail experts suggest.

The festive season of 2010 is proving to be a concern among many UK retailers as mixed messages about the economy and concern over house prices and the impact of public spending cuts leave many feeling wary.

PricewaterhouseCoopers LLP (PwC) found that Shops are preparing to launch their Christmas ranges as early as possible.

Despite recent figures showing an increase in like-for-like sales in June, the majority of retailers are planning to stock moderately for Christmas to avoid the risk of being caught out by potential dips in consumer confidence, for the second time.

Andy Lyon, retail partner at PwC, said:

“It's a case of once bitten twice shy. Many retailers were caught out in Christmas 2008 and left with goods that they were unable to sell. In 2009, they stocked more conservatively and this paid off with an improvement in profitability and they are expected to take a similar approach this year.”

Recent reports about house price volatility warned of a high degree of uncertainty over future house price prospects.

PwC's UK Economic Outlook report stated that there was a 70% chance that house prices would not have recovered to 2007 levels by 2015 in real terms. The impact of the public sector cuts on jobs in the sector is also a concern for many households.