Consumers Still Not Spending

Shoppers have continued to keep their spending in check despite recent signs of hope for the UK economy.

According to The British Retail Consortium UK retail sales values were down 0.3% on a like-for-like basis from February 2011, when sales had fallen 0.4%.

Total sales, including store openings, were up 2.3% but with inflation at 3.6% in January this still shows customers are buying less than a year ago.

Stephen Robertson, Director General, British Retail Consortium, said: "The reality of weak sales shows that a convincing revival remains illusory.

"Falling inflation has eased the squeeze on household finances and halted the slide in consumer confidence but that's at risk from fuel price rises and Budget uncertainty. Unemployment is expected to rise further causing increased nervousness about job security, which is keeping confidence fragile. Any sense of improving optimism is not yet translating into more spending.

"Total sales growth is still below inflation, so overall customers are actually buying less than a year ago, while discounts are eating into margins. Food picked up but non-food sales deteriorated with goods affected by the slow housing market among those particularly struggling.

"In this climate of continued caution, the Chancellor must use the Budget to hold back business costs, which will support jobs, growth and the much-needed consumer turnaround."

(LB/GK)