Retail sales slump to nine-year low

12 April 2012

Retail sales dropped 1.2% last month as demand for furniture slumped to its lowest level for at least nine years, figures have revealed.

Heavy seasonal discounting failed to lift sales of big-ticket furniture items amid continuing housing market woes and consumer belt-tightening, according to the latest British Retail Consortium (BRC) and KPMG report.

But the year-on-year fall in comparable sales values was less severe than the 1.8% dive seen the previous month and showed some encouraging signs for the battered retail sector, said the BRC.

Clothes and footwear sales rose for the first time in 10 months, boosted by the early spring sunshine.

The figures for the five weeks to April 4 were also disadvantaged by this year's later Easter, although the better weather also makes comparisons difficult, given the unusual cold snap seen last year.

Food sales showed slightly stronger growth in March and were up 4.7% on a like-for-like basis in the three months to March. However, with food inflation running at 9%, the BRC said this was the main contributor to the hike in the value of sales.

Stephen Robertson, director-general of the BRC, said: "A slight air of pre-spring optimism tempted customers to buy new-season clothing and women's footwear. But this is unlikely to be the basis of sustained improvement. Customers are still worried about jobs and their own finances - so they're keeping spending under tight control."

Like-for-like sales growth has now been negative in nine of the past 10 months for the BRC data.

Official retail figures shocked the market last month when they revealed a far worse-than-expected 1.9% decline in sales volumes between January and February.

The CBI business body added to the gloom with its retail survey suggesting sales had fallen sharply in March.

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