Tuesday, 12 April 2011

Latest retail figures show UK's growth is stalling

The British Retail Consortium (BRC) has recorded its worst fall in sales since records began in 1996, a further sign of difficult times on the High Street.

The BRC said total sales in March were down 1.9% on a year ago, although the early timing of Easter last year had an effect on the figures.

But the BRC said shoppers did not want to spend "unless they really had to".

Footwear was the only growth sector, as food and drink, clothing, homeware, electrical, and others all fell.

Meanwhile, like-for-like sales were down 3.5%, in their worst showing in nearly six years.

Internet sales, which have been defying the general downward trend, showed their slowest growth since records began in 2008.

Internet sales were 7.5% higher than a year ago, much weaker than the 10.4% in February.

Clothes and book sales suffered their largest declines since 2009 and 2005 respectively.

Falling disposable incomes and the fear of worse to come means people don't want to spend
Stephen Robertson

BRC director general
"We have seen an emergence of new, lower spending patterns since the middle of January, which are currently continuing to trend downwards," said Helen Dickinson, head of retail at survey partner KPMG.

"Many retailers will not be able to sustain this ongoing weakness in demand beyond the short-term and are hoping for some good news around the extended bank holiday period and a feel-good factor driven by the royal wedding."

The poor sales figures came despite the fact that more consumers visited the High Street, separate figures suggested.

Research group Springboard said that footfall in town centres and High Streets across the UK rose by 7.8% in March compared with the previous month, and fell by 1.3% against a year earlier - the smallest annual decline in four years.

"Whilst it is early days, this starts to tell a positive story about how consumers are returning to their local High Streets," said Steve Booth, Springboard's chief executive.

There has been a string of gloomy outlooks recently from the likes of Next, Mothercare, HMV, Currys and PC World parent Dixons Retail.

The BRC pointed out that "uncomfortably high inflation and low wage growth have produced the first year-on-year fall in disposable incomes for 30 years".

"Falling disposable incomes and the fear of worse to come means people don't want to spend," added BRC director general Stephen Robertson.

"There's only so much discounts and promotions can do to overcome that."

All this makes even more gloomy reading for George Osbourne and his pals at 10 Downing Street. Figures like th ese coupled with the inflation figures out soon will get them sweating as teh cuts start to bite they will be panicaing how to get the economy going again.

There is no catalyst to jump start the economy and i see none of the horizon either. I foresee a period of stagnation in the British economy in this next decade it will be interesting how this government and the next play it from now on.

1 comment:

  1. Sadly this ConDem bunch will use the gloomy figures this year to their advantage when it comes to the General Election.

    Most of the public will have forgotten about the harsh cuts and rising inflation in 2011 (we won't of course!). Cameron and Osbourne will be trying to win votes by saying the national debt is lower and throw in a few tax cuts (even though they raised taxes this year).

    They promised to bring employment to the north and stabalise the UK - instead, through their austerity 'plan' - they have increased unemployment, caused people to spend less and helped ruin the UK.