Beales To Face Challenging Year

Department store operator Beales is having trouble spotting light at the end of the tunnel in a tough UK market which has puts its core upmarket customers under pressure.

The Bournemouth based group, which operates 12 regional stores, said it is facing another 'challenging year' as it reported a like-for-like sales decrease of 4.5 per cent in the year to November 1.

Sales worsened as the year progressed, with first half like-for-like sales declining by 2.5 per cent, increasing to a second half decline of 6.8 per cent as the impact of a tougher trading environment combined with disruption from store refurbishments.

Sales remained hard to come by over the key Christmas and New Year sales period, with like-for-like sales down 5 per cent in the eleven weeks to January 17.

Chairman James Sexton said: "All indications are that 2004 will be another very challenging year; prime costs continue to increase and we anticipate there will be little sales price inflation. Trading over the 2003 Christmas period and the New Year continued to reflect the problems of the past financial year and the retail sector as a whole."

The company said its core customers, mainly upmarket and later in life, had seen their disposable income come under increasing pressure - higher council tax bills and falling value of investments and stocks have hit the UK middle classes hard.

This combined with the effects of intense competition in the high street, with high levels of discounting. Store refurbishments in Bournemouth and Bedford were also both completed in 2003, affecting sales.