A mild start to the winter as hit sales of higher priced winter lines at the UK discount clothing retailer. Matalan said trading has deteriorated since its interim results announcement on October 7. In the 14 weeks to December 6, Matalan's total retail sales grew by 2.4 per cent, with like-for-like sales down by 7 per cent.

The reduction in like- for-like sales is due to 1.2 per cent fewer transactions as well a 5.8 per cent fall in Matalan's average basket value. Gross margins for the past 14 weeks are up 0.2 per cent. The company said it has been hit by lower average selling prices, with consumers buying fewer higher priced items such as winter coats and leather jackets.

The British Retail Consortium said earlier this week that mild weather in the UK during November had affected sales of winter clothing generally. Matalan said it also believed the sales trend "is being felt across the wider market." Better sales of lower priced items, including improved Christmas gift and accessories ranges, have not been enough to offset the fall in sales of higher priced items.

Matalan said full year results will depend upon the rest of the Christmas trading period, as well as the critical end of season sale starting on December 26, but warned: "At this stage however, the board considers it unlikely that the shortfall in sales to date will be recovered in the remainder of the financial year.