UK High Street sales boom fizzles out

The High Street spending boom has begun to slow down, with shoppers apparently struggling with large credit card bills, following the record Christmas and New Year spending spree, the latest retail figures have shown.

According to figures from the Office for National Statistics, retail sales volumes grew by 0.1% in March. This compares with a revised 1.1% for the month of February.

Retailers and economists have been predicting this slowdown in spending, mainly because of the fact that many shoppers preferred to pay with plastic, rather than cash, at Christmas, leaving many people with large credit card bills.

Three months after the Christmas boom, however, spending was still growing, but at a slower pace – however the annual rate still posted a 5.6% jump, down from 5.8% in the year up to February.

The most popular purchases amongst shoppers were textiles, clothing and footwear, with sales at stores selling those kinds of goods rising by 0.9% in March. This put sales at 12.9% higher than a year ago.

However, general retailers, such as department stores, suffered a 1.3% drop in sales in March from the previous month, making for the worst performance for non-specialist retailers since January 2001.

However, the broader trend towards slower sales growth seems to lean towards forecasts made by both the Conference of British Industry and retail research group, Verdict - Verdict has predicted that sales growth in the UK will more than halve by the end of the summer

Retailers also see little scope for raising prices – High Street prices, as measured by the retail sales deflator, rose by only 0.1% in March, compared to 0.4% in February.

(KMcA)