February saw the lowest sales on the high street for almost two years. The latest figures are proof of just how hard the consumer economy has been hit by the increase in household bills and how the consumer is rapidly losing confidence in the high street prices.
Figures for the month show that like-for-like sales fell by 0.4pc while the total of all sales rose by just 1.1pc. Although February is generally a quiet one, statistics show that this was the poorest monthly performance since May 2009.
The only industries that seemed immune from the poor performance rates were footwear and food and drink retailers who actually positive sales for the month. This meant that clothing, furniture and electrical retailers saw “sharply” negative sales in comparison according to the BRC-KPMG Retail Sales Monitor.
It seems that the January VAT increase hit furniture sales particularly hard with sales for large items being especially low.
The weak sales have been recognised by experts as bad news with one Stephen Robertson the director general of the British Retail Consortium saying:
“Apart from a bit of help from half-term for some retailers, February’s sales were weak. Other than the negative figures last April, this February’s 1.1pc total sales growth is the poorest since May 2009- even poorer when the impact of the VAT rise on inflation is taken into account.”
The weak sales on the high street are thought to be a direct response to the rising cost of fuel, food and utility bills. People simply don’t have the extra cash to spend on luxuries on the high street, instead are sticking to spending on the absolute essentials such as food. Asda, the supermarket has published an estimate that households are now £9 a week poorer than they were a year ago.
Consumers have now been forced to alter their spending habits to reflect the decrease in disposable income that they now have to spend. Helen Dickinson, the head of retail at KPMG has noted that nowadays the price and value have become “higher decision-making criteria” when people go shopping.
It seems that the deteriorating sales on the high street have got everyone worried. The BRC’s Mr Robertson said that retailers have warned the Coalition Government that something has to give in order to reduce red tape and help them to create jobs in a bid to aid economic recovery. The group is hoping for urgent action from the Chancellor in this month’s budget.
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