BRC reports retail sales drop

Retail sales in the UK fell to their lowest level in a decade, according to new figures from the British Retail Consortium (BRC).

The figures showed that retail sales in the UK in April fell by 4.7% on a like-for-like basis and by 1.3% on total basis, compared with last year’s figures.

The BRC said that the fall was exaggerated partly because of Easter, which fell in March this year. However, the figures were still the worst reported since 1995 when BRC records began.

The BRC also reported that the three-month trend rate of growth fell last month to –0.9% from 0.7% in March for like-for-like sales and dropped to 2.6% from 4.0% for total sales.

The BRC said that discretionary purchases and non-essential items suffered the most from the slowdown, although trade had generally worsened “across the board”. Higher priced items, particularly electrical ‘white goods’ and furniture were also affected.

However, the BRC found that the market for younger fashion clothing and footwear benefited slightly when the weather was better, although overall trade was described as “tough”.

The BRC attributed the fall to consumer caution and the slowing house market.

Kevin Hawkins, Director General of the BRC, said that April had been “another very tough month” for retailers. He said: “Some stores enjoyed stronger sales on warmer days, but this was short-lived and sales in most sectors suffered, especially big-ticket items.”

Mr Hawkins blamed a slowing house market, “pre-election economic uncertainty” and the threat of interest rate rises. He said that it was “crucial” that the Bank of England considered a gradual reduction in interest rates. Yesterday, it was announced that interest rates would be kept on hold at 4.75% for the ninth month in a row.

Helen Dickinson, Head of Retail at KPMG, said: “The timing of Easter has artificially deflated this month’s figures, tipping total sales into a decline of 1.3% but the underlying trend is still downwards; across March and April like-for-like sales are again negative. This performance is fairly consistent across the sectors with little worthy of note other than in food – which is less impacted by any downturn – and in women’s clothing where some star performers continue to convince their customers to spend.”

(KMcA)