Retail Sales Put an End to Speculation That We might have Seen the Bottom in the U.K…Perhaps the U.S. is Heading the Same Route

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The high street suffered a dismal month in February as the value of like- for-like sales fell by 1.8 per cent, according to the British Retail Consortium (BRC).

Experts said that the 1.1 per cent rise in sales enjoyed by retailers in January was a “discount-driven blip”. They added that the continuing downturn on the high street could lead to further job cuts and store closures.

The BRC said that non-food stores were hit worst, with a 5.3 per cent fall in sales in the three months to February against the same period a year earlier.

Stephen Robertson, the BRC’s director-general, said: “The short burst of spending unleashed by January clearances has largely vanished, replaced by sales as weak as most of last year.”

Clothes shops reported that only sales of handbags, jewellery and hair accessories grew as women chose to update wardrobes by accessorising. Electrical stores said that customers were buying new items only to replace broken ones, rather than upgrading or buying additional items. However, the slump in the housing market boosted sales of DIY goods as homeowners chose to revamp their properties.

Supermarkets fared better, with like-for-like food sales rising 4.3 per cent, a more modest rise than the 4.4 per cent jump in the three months to January. Cold weather prompted a surge in sales of casserole meats, sausages and winter vegetables.

The poorest tenth of the population suffers inflation more than 50 times higher than the RPI measure, which is 0.1 per cent, the Institute for Fiscal Studies said.

The most hard-pressed households have an effective inflation rate of 5.4 per cent, while those aged over 80 face a 7.1 per cent annual rise in prices because both of these households spend a bigger proportion of income on food and energy, both of which are still rising in cost. In contrast, rich households are enjoying a fall in the cost of living, with -1.3 per cent inflation; 30 to 39-year-olds have inflation of -0.9 per cent.