BRC: High Street remains under pressure

| October 11, 2011
”BRC:

The British Retail Consortium (BRC) has today announced retail sales saw a slight improvement in September

According to the BRC/KPMG retail sales monitor, like-for-like sales (which exclude the impact of sales at new stores) rose 0.3% on an annual basis.

However, clothing sales suffered while demand for big-ticket items remained weak due to fragile consumer confidence.

Commenting, Stephen Robertson, director general of the BRC, said retailers should be “thankful” for the slight pick-up in this challenging environment, “but underlying conditions remain weak”.

He added: “Spending growth is below inflation meaning customers are buying less than this time last year. And there’s no guarantee next month’s figure will be better.”

The figures come hot on the heels of those from accountancy firm, BDO, who said the warm weather during September failed to boost the High Street after like-for-like sales were 4% lower last month compared with a year earlier – the biggest fall since March 2009.

The BDO report said people were more interested in enjoying the warm days rather than hitting the shops.

BDO said fashion retailers, in particular, suffered the most as consumers avoided stocking up on winter clothing, as temperatures soared unusually high for the time of year.

Same-store sales at fashion stores slumped 5.1% in September, BDO added.

Retail sales have slowed significantly this year as households continue to be squeezed by higher inflation, rising unemployment and sluggish wage growth and this is a major threat to the retail industry.

There has been a raft of doom and gloom today after the Office for National Statistics (ONS) revealed UK factory output fell 0.3% in August on a monthly basis.

The reading was worse than economists had expected and confirm weak prospects for the economy after the figures suggest a poor start to the third quarter.

In addition, the British Chambers of Commerce said the fresh round of quantitative easing announced by the Bank of England last week may not be enough to prevent the economy from slipping back into recession and “more radical measures” are required.

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