Frasers’ boss blasts ‘shambolic’ Reeves as retailers face a dismal Christmas
Rachel Reeves’ ‘shambolic’ handling of the Budget was yesterday blasted by one of Britain’s largest retailers for derailing consumer confidence ahead of Christmas.
Michael Murray, chief executive of Frasers Group, was the latest business leader to complain about the unsettling impact of speculation ahead of last week’s event.
It came as figures revealed shopping visits and sales were dampened by Budget tax raid fears.
The late November timing of the Budget had already unsettled Britain’s embattled retail sector – as it threatened to disrupt the ‘Golden Quarter’ covering Black Friday and the run-up to Christmas.
Frasers, whose retail brands include Sports Direct, Flannels and House of Fraser, said market conditions were ‘tough’ and consumer confidence had been ‘very subdued’.
Murray also said: ‘It was a shambolic run-up to the Budget – all those kites being flown and pulled down, the headlines all over the place.
Christmas gloom: Frasers’ boss Michael Murray (pictured) was the latest business leader to complain of the unsettling impact of speculation ahead of last week’s Budget
It doesn’t give the consumer confidence, despite there being savings in people’s accounts to go out and spend.’
He added: ‘It didn’t help that the Budget got pushed back, because that elongated the confusion.’
He said the uncertainty had led to customers ‘battening down the hatches’ and that he ‘did not blame’ them for cutting back.
And he also said some of Frasers’ shops will see their business rates bill rise by 100 per cent and that this ‘doesn’t seem fair or equitable’.
‘Consumer confidence has also fallen sharply and wider economic conditions are unlikely to have encouraged many shoppers to go out and spend in discretionary categories.’
The group is facing ‘significant increases in staff costs’ following hikes in the national minimum wage and employers’ National Insurance in April.
Frasers reported a 5 per cent rise in revenues to £2.6billion for the six months to October 26, driven by rising sales for Sports Direct.
Adjusted pre-tax profit fell 3 per cent to £291million but it is on course to hit annual profit forecasts of £550million to £600million. Frasers shares fell 2.7 per cent, or 19.5p, to 704p.
Meanwhile, trade body the British Retail Consortium has revealed that visits to shopping destinations fell 0.8 per cent in November compared to last year.
Chief executive Helen Dickinson said: ‘Wet weather and the prospect of a tax-raising Budget meant some shoppers held off visits last month.’
The number of shoppers slumped by 1.2 per cent while retail parks saw a decline of 0.4 per cent and shopping centres a slide of 1.3 per cent.
Separate data from business advisory firm BDO revealed sales volumes were ‘significantly down’.
Shop sales by value grew by just 1.3 v. Because this is well below the rate at which prices are going up, it means the volume of goods sold has fallen.
Sophie Michael, head of retail at BDO, said: ‘Black Friday failed to drive any meaningful sales growth or get shoppers spending in stores in November.
‘Consumer confidence has also fallen sharply and wider economic conditions are unlikely to have encouraged many shoppers to go out and spend in discretionary categories.’
DIY INVESTING PLATFORMS
AJ Bell
AJ Bell
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund dealing and investment ideas
interactive investor
interactive investor
Flat-fee investing from £4.99 per month
Freetrade
Freetrade
Investing Isa now free on basic plan
Trading 212
Trading 212
Free share dealing and no account fee
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
…
Read More: Frasers’ boss blasts ‘shambolic’ Reeves as retailers face a dismal Christmas