SPENDING on the UK high street plummeted at a record rate last month, the British Retail Consortium (BRC) said today.
The year-on-year drop was partly due to the Easter holidays switching to April this year, which delayed a traditional boost in spending.
“This year’s later Easter is a factor but this fall goes way beyond anything that can be explained by that alone,” said BRC director Stephen Robertson.
Total sales were down 1.9 per cent compared to March 2010, the sharpest monthly fall since the survey began in 1995.
Meanwhile, “like-for-like” sales, which exclude shop floor expansions, were down 3.5 per cent.
“Uncomfortably high inflation and low wage growth have produced the first year-on-year fall in disposable incomes for thirty years,” Robertson said.
“These pressures aren’t going away and the arrival of higher national insurance is likely to compound them in the immediate future,” Robertson added.
This was the second straight contraction in like-for-like sales, after a 0.4 per cent decline in February.
“Weakening consumer spending is a major concern for overall growth prospects, as consumer spending accounts for some 65 per cent of GDP,” commented Howard Archer of IHS Global Insight.
Underlying like-for-like sales are down 0.8 per cent according to the survey’s three-month annualised figures, which provide a less volatile perspective.
Total underlying sales are up 0.9 per cent due to a 2.2 per cent rise in food sales. Other retail sales, in total, have remained flat.