Retail sales bleak as spending cuts dent confidence

RETAIL sales growth is slowing as fears over public spending cuts hit consumer confidence, according to the British Retail Consortium (BRC).

Like-for like sales were up just 0.5 per cent in July compared with the same month last year.

That was down on the 1.8 per cent rise the year before.

Food sales performed relatively well but footwear and homeware sales were poor.

The BRC said that “big ticket” items in homeware had been particularly hit by the increased uncertainty caused by the government’s plans for a cull in public sector jobs.

On the upside clothing saw a lift from discounting while cosmetics also rallied. The figures showed that from May to July like-for-like sales on all goods rose 0.9 per cent.

Director general of the British Retail Consortium Stephen Robertson said: “These are poor results for non-food retailing, with some sectors actually seeing sales falls. The vitality has even faded from online sales growth. By contrast food sales continue to be resilient.”

He added: “Talk of public spending cuts is unsettling customers and they are concentrating on essentials.”

Robertson said interest rates should remain low as consumer confidence was still at a low ebb.

He continued: “It’s clear the recovery continues to need support. The Bank of England must resist pressure to increase interest rates too soon.” The data showed that England’s early exit from the World Cup had denied retailers an extra lift.