UK retailers are preparing to reveal how they have coped with weakening consumer spending as major high street names post results over the coming week. The Office for National Statistics reported that retail sales volumes fell by more than expected at 0.4% in September, with slow demand for autumn and winter clothing lines cited as a factor. Recent data has pointed to a difficult backdrop for shoppers, with rising energy bills and wider economic concerns weighing on spending habits.
Marks & Spencer will unveil its latest half-year results on Wednesday, offering a window into how retailers are navigating challenging conditions. The company is expected to report profits of around £390 million for the half-year to September, more than double the previous year's figures, as its clothing and home sales rebound from disruptions caused by a cyber attack last year. However, this figure is still likely to fall below the £413.1 million achieved two years ago, before the attack took place. The retailer is also expected to showcase continued strength in its food business, which has benefited from investments into its store formats.
Associated British Foods, which owns Primark, will also report full-year results on Wednesday as it prepares for a major corporate overhaul. The conglomerate plans to split off Primark and list it separately on the FTSE 100 by the end of next year. ABF indicated last month that Primark sales are expected to have declined by 2.6% over the financial year, reflecting pressure from tight consumer budgets. In response, Primark has unveiled plans to start online home deliveries to accelerate growth.
Online fashion retailer Asos and department store operator Next will provide updates on Thursday. Asos shares have fallen 15% since the start of the month following a cyber attack, in which hackers impersonated a trusted contact to obtain login information and accessed personal data including names and contact details. The company has continued trading and will aim to reassure investors that the incident has not affected customer demand. Next had previously cut its sales growth forecast for the second half of the year to 2%, down from 2.8%, citing concerns over the rising cost of living, higher mortgage costs and a cooling labour market.
For UK households, these results signal that retailers expect consumer spending to remain under pressure, meaning fewer discounts and promotions may be available during the crucial Christmas trading period.