Retail Recovery Hopes Dashed

(Press Association) – HIGH STREET RECOVERY HOPES have been branded ‘premature’ after figures showed an early summer sales revival ran out of steam during August.

Like-for-like sales were back in negative territory — down 0.1% — over the month, according to the British Retail Consortium’s (BRC) latest sales monitor.

The disappointing result came as sales of clothing and footwear slid back and the brief recovery in furniture and homewares faltered.

BRC director general Stephen Robertson said: ‘The stronger figures of June and July haven’t been sustained. It’s clear the deceptively good sales growth of those months was due to summer sun and price cuts — not any major revival in how customers are feeling. What spending we now have is all about value and essentials.’

In the three months to August, like-for-like food sales were up 5.3%, although comparative sales of non-food items declined 0.7%. Internet sales growth also slowed to 7.9% in August — the lowest level since May, the BRC added.

Consumers are still reluctant to commit to expensive household goods without heavy discounts, and unwilling to stock up on winter clothing until the cold weather arrives, Mr Robertson said.

He warned: ‘As we head into autumn, we mustn’t make too much of any positive sales growth; because the comparison will be with very weak figures a year ago when total sales growth dipped below zero.’

Helen Dickinson, head of retail at financial services firm KPMG, added that many retailers will be facing ‘some serious challenges around controlling costs and generating cash.’

The figures come two weeks after the CBI business group’s own distributive trades survey also showed a poor sales performance in August.

Although high street sentiment is improving, the balance of retailers reporting lower sales volumes rose for the fourth month running in August.

The CBI predicted the ‘disappointing’ summer trading would continue well into September.

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