Weak rise in high street sales

SALES on the high street picked up slightly last month but the positive performance was flattered by an extremely weak August 2009, the British Retail Consortium (BRC) will say today.

Like-for-like sales values, which strip out the effect on sales of changes in floorspace, rose one per cent in August compared to the same period a year earlier with food sales growth slowing slightly. However, it was still stronger than in both May and June and, in the three months to August, food sales rose 1.8 per cent on a like-for-like basis.

Non-food sales gained 0.3 per cent but this was mostly driven by promotions, the BRC said.

Stephen Robertson, director general of the BRC, said: “The good news is sales are still growing but anxiety about job cuts and tax rises is putting people off making major spending commitments.”

He added: “With the government about to detail its cuts and a VAT rise in prospect, retailers will be hoping consumer confidence doesn’t slip over the next few months.”

Helen Dickinson, head of retail at KPMG, said: “Overall sales performance deteriorated marginally as the month progressed, driven by a slowing in food, but all other sectors continued to show high levels of volatility.”

Economists expect retail sales to be hit by waning consumer confidence, a dip in disposable income from austerity cuts and the VAT hike in January.