BRC: UK retail sales down 0.9% on year

| August 12, 2008 | 0 Comments

Figures from the British Retail Consortium (BRC) have revealed that consumers continue to rein in their spending, after it revealed that like-for-like retail sales fell 0.9% compared with July 2007.

However, sales of food and drink were up, but against weak sales compared with a year earlier.

The BRC described it as ‘frivolous shopping off the agenda’ after heavy store discounts failed to attract consumers to spend money.

The results mean that there has been negative like-for-like sales growth for the fourth time in five months, according to the BRC.

Between May and July, like-for-like sales were 0.3% lower than the same period in 2007 and the BRC believes the slowdown is set to continue.

As a result of the ongoing credit crunch, UK households are cutting back on spending. Rising mortgage payments, together with the sharp rise in food and fuel costs is adding to the financial strain on UK families.

Reports show that families feel much poorer and are cutting back and are only buying essential items. Spending on furniture and other household items have been hit particularly hard, said the BRC.

The news from the BRC follows news that the UK’s annual rate of inflation has surged to a record high of 4.4% in July. Inflation is now at its highest level since current records began in 1997.

The figure is up from 3.8% in June and is more than double the Government’s target of 2% and above analysts’ forecast of 4.2%.

The rise in the Consumer Prices Index (CPI) was also higher than expected, with food prices up a record 13.7% on the year, primarily due to surging meat prices, in particular bacon, pork and poultry.

Meanwhile, soaring petrol prices have fuelled inflation as the data was collected prior to the recent fall in oil prices.

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