Mixed reports on retail sales
Growth in retail sales was relatively weak in the three months to April, according to the latest figures from Office for National Statistics.
Sales for the quarter were up by just 0.4% compared with the previous three months, and by 3.5% on the same period last year. These growth rates are lower than those reported for most of the last three years, the ONS revealed.
Non-food retailers, particularly department stores, were the worst performers, with prices continuing to fall in a bid to attract customers.
Reacting to the news, Liberal Democrat spokesperson on treasury matters Matthew Taylor MP, said: “After manufacturing and investment took a hammering last year there was always the risk that consumer borrowing would not continue to support retail sales growth. That now appears to be happening.”
“Gordon Brown’s optimistic growth forecasts look more unrealistic by the day,” he added.
There are concerns that despite the current low interest rates – just 3.75% – consumers are beginning to worry about their levels of debt – something highlighted by a Citizens’ Advice Bureau report this week, which suggested that some people were “over-borrowing”.
However, the picture from the British Retail Consortium-KPMG Sales Monitor was more upbeat. The three-month trend rates of growth increased slightly from 1.6% in March to 1.7% in April for like-for-like sales, and from 4.3% to 4.4% for total sales.
There has been some difficulty in analysing the data because of the late Easter this year, but retailers themselves were relatively confident about the future prospects for the high street.
Earlier this week Marks and Spencer reported pre-tax profits of £679m, and although chief executive Roger Homes anticipated a “challenging” year ahead, he also suggested that there would be opportunities for growth, but at a lower level than last year.
