The British Retail Consortium (BRC) has issued a gloomy outlook for the UK high street, cautioning that “belt tightening” has begun in earnest. The consortium warns that the slow February, boosted only by an early Mothering Sunday and strong food and drink sales, signals a tight outlook for the retailing industry.
Like-for-like sales rose 1.5% last month, down from January’s 2.6% rise, as New Year and Christmas bills kicked in. On a three-month basis, sales edged up 1.6% from 1.5%, with food showing strong gains.
Stephen Robertson, BRC director general, says: “After a blip at the star of the year as clearance sales temporarily got customers spending, belt tightening began in earnest in February when the Christmas and New Year credit card bills came home to roost.” He says that although a “welcome boost” was provided by an early Mothering Sunday, which fell in March in 2007, customers “remained cautious”.
The food and drink sector, which accounts for around 50% of the total retail market, did well, performing better than in January. However, furniture sales dropped sharply – seeing the largest drop since July 2005.
And clothes sales were lower than a year earlier for the fifth month in a row, “despite continued discounting and promotions”.
Robertson warns that retailers and consumers are being squeezed by sharp increases in utility bills and fuel costs, urging the Chancellor to unveil an “economy reviving” Budget on Wednesday, rather than one “piling on new taxes and regulations”.