High street thaw 'illusory', says BRC

Figures by the British Retail Consortium show sales dropped by 0.3% in February - which is more in keeping with anecdotal evidence.

by Emma Haslett
Last Updated: 06 Nov 2012
When retailers reported their Christmas trading figures, MT was rather surprised at how well some of them had done, considering their vociferous complaints over the festive period. It happened again when the Office for National Statistics said sales rose by 0.9% in January compared with December. But now the British Retail Consortium has said that any growth on the high street ‘remains illusory’. Its monthly figures for February are a case in point: while total sales rose by 2.3%, compared with last February’s more demure 1.1% rise; when you strip out new store openings, retailers’ year-on-year sales actually dropped by 0.3%.

It gets worse: while that fall is a (very) slight improvement on last year’s 0.4% drop, it doesn’t take into account the heavy discounting most retailers had to do to get the customers into their stores in the first place, so margins will inevitably have been squeezed heavily. And by the looks of things, the retailers doing best were food retailers – non-food items are still proving very difficult to shift.

The BRC reckons that although falling inflation has eased the pain when it comes to paying for their weekly shop, there are still causes for concern. For a start, the rise in fuel prices (which reached a record high today), while unemployment is still on its way up, means consumers are keeping a tight rein on their spending. Then there’s the old ‘Budget uncertainty’ nugget…

The good news was that, as is becoming increasingly common in these sorts of announcements, sales from the ‘internet, mail order and telephone’ (let’s face it – mainly the internet), rose 9.9% on last year – although that’s still a slowdown on growth of 11.3% in January and 18.5% in December.

As is its wont around this time of year, the BRC took the opportunity to remind George Osborne that the fate of retailers is in his hands when he delivers the Budget later this month. ‘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,’ said director general Stephen Robertson. If Osborne manages to satisfy even half the lobby groups leaning on him in the run-up to the Budget, then it'll be a miracle...

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