Asos sales slip as retailers suffer pre-Budget slowdown
Boss José Antonio Ramos Calamonte flags customer 'uncertainty' ONS data shows retail sales down 1.1% as shoppers cut back ahead of Budget
Asos has promised a ‘new era of customer re-engagement’ after retail sales in the UK fell unexpectedly last month amid economic uncertainty.José Antonio Ramos Calamonte, the fast fashion retailer’s boss, said that consumers were feeling ‘some level of uncertainty, because we don't know what is going to happen with the Budget’.Dismal figures from the Office for National Statistics (ONS) revealed that retail sales fell 1.1 per cent month on month in October, marking the first drop since May.Consumers have been holding back on purchases ahead of discounts for Black Friday and clarity on potential tax hikes at the Budget next week, economists said.Retailers have also bemoaned the late timing of the Budget, which falls weeks later than previous ones.JD Sports yesterday blamed rising levels of youth employment for hitting sales of its trainers and said it was ‘mindful’ of weaker consumer spending power. Asos said it had not seen a 'big change' in customer behaviour but there was 'uncertainty' ahead of the Budget Asos sales fell 15 per cent to £2.5billion for the year to 31 August as its boss insisted he would not ‘take any shortcut’ to growth.He said that Asos had not seen a ‘big change’ in consumer behaviour recently and that ‘it has not been an easy market, not just in the last month, but probably in the last year’. Julie Palmer, partner at Begbies Traynor, said the ONS figures were ‘potentially a sign that consumers and businesses are taking a breath ahead of an anxiously anticipated Budget'.‘The lack of growth, falling demand and flatlining consumer confidence is the final warning shot from the High Street to the Chancellor before the Budget,’ she added.Businesses have been lobbying the government not to increase taxes this year, after a £7billion raid on retailers at last year’s Budget.But Calamonte insisted that customers would respond to ‘the right thing’ in the group’s strategy, despite pressure on households.He has been steering a painful turnaround at the retailer, which has seen its fortunes reverse in recent years after a lockdown-era boom in online shopping.Asos has come under pressure from online competitors, including the cut-price Chinese brands Shein and Temu, as well as more traditional rivals including Zara and H&M.But Calamonte insisted that ‘the most difficult work [is] behind us’ after working to ‘rebuild the economics and stabilise the business’ this year, narrowing losses from £126million to £98.2million.His revival plan has included more partnerships with brands such as Charlotte Tilbury, Mango and Nike, as well as reducing levels of excess stock.The business is now in a ‘new era of customer re-engagement’, he said, which will include a focus on offering shoppers trendy styles and making improvements to its app.Adam Vettese, market analyst at eToro, said: 'Although ASOS has made progress in improving profitability through better stock management and cost cuts, these gains are overshadowed by the persistent weakness in customer numbers and falling revenues. 'The reduction in active shoppers highlights the significant challenge ASOS faces in regaining market share amid intense competition and changing consumer habits.'DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate 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.Compare the best investing account for you
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Asos sales slip as retailers suffer pre-Budget slowdown
