BRC: UK retail sales weak in August

| September 6, 2011 | 0 Comments

The British Retail Consortium (BRC) has today reported weak retail sales for August.

According to the BRC, like-for-like sales (which exclude the impact of sales at new stores) fell 0.6% last month on an annual basis.

Overall sales rose 1.5%, however, this was much lower than the 2.8% rise noted in August 2010.

Commenting, Stephen Robertson, director general of the BRC, said: “The retail sector’s performance for August has been essentially flat, particularly bearing in mind the increase in VAT, which will be responsible for some of the growth in spending.

“Poor consumer confidence, high inflation and the ongoing squeeze on personal finances remain the biggest threats to the retail sector,” he added.

Good weather at the beginning of the month lifted sales but did not last long enough to make a major impact for the month as a whole, the BRC added.

Meanwhile, food and drink sales were the only areas in which sales noted a rise from the previous month but sales of all other goods, declined.

The figures come just a day after accountancy firm BDO warned Britain’s retailers should prepare themselves for some tough times as pressure builds on consumers in the run-up to Christmas.

According to the firm’s High Street Sales Tracker, sales figures for August fell 2.2% among mid-market retailers, attributed to the riots and cooler weather during the month.

The riots, in particular, caused widespread disruption to many High Street retailers as they were forced to close earlier than usual and consumers were deterred from visiting the shops.

Trading updates from Next, JD Wetherspoon, Costa Coffee parent Whitbread, Carpetright, Home Retail Group, B&Q parent Kingfisher and Primark parent Associated British Foods are all due in the next two weeks and analysts will be looking for signs of trouble on the High Street.

Several retailers are under severe financial strain as the face their quarterly rent deadline at the end of this month.

Earlier this year, the rent deadlines at the end of March and June resulted in a series of retailers entering administration including Focus DIY, Habitat, TJ Hughes and fashion chain Jane Norman.

Finally, accountancy firm PricewaterhouseCoopers said that in the second quarter of 2011, 375 retailers call in administrators – a rise of 9% on the same period a year earlier.

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