High street sees no sunshine despite good weather |
|
|
Published
:
Tue, 05 Jul 2005 20:35
|
LONDON: Another month went by without any significant movement in the sales of retailers. The slump in consumer confidence continues to drive the downturn despite good weather and ‘sale’ periods brought forward from July to June.
Overall however, the drop in sales during June wasn’t as bad as in the previous two months. The British Retail Consortium provided figures which said like-for-like sales had dropped by 0.5 percent in June, which is better than April’s decline of 4.7 percent and May’s drop of 2.4 percent. The three month trend which was at -1.5 percent in May had dropped to -2.4 percent in June.
If it is any consolation, total retail sales had also been 3.5 percent higher last month compared to the same month last year. This included new store openings. Some clearance sales aided by sunny weather also helped draw consumers out of their homes. Bookstores were among the few who did well.
Essential items such as food and clothing contributed to this marginal rise while luxury goods or non-essential items saw a clear slump in sales. ‘Big ticket’ electrical appliances and home furnishings did not appear on most consumers’ ‘must-buy’ list. Consumers were clearly disinclined to splurge, pressured as they were, by continuing uncertainty over the timing in an interest rate cut and over house prices.
Kevin Hawkins, director of BRC, said “Retailers cannot any more rely on good weather to bring in customers.” Many market analysts believed that cutting interest rates by a quarter point, to “4.5 percent, might help stimulate sales again”. Experts insist there is a greater chance the rates will be maintained at 4.75 percent for the tenth consecutive month.
The BRC has urged the MPC to consider cutting interest rate by a quarter percent. The Bank of England’s Monetary Policy committee meets to decide the next move for the base rate. Even if they do slash the rate by a .25 percent, it will be some time before its effect can be seen on retail business.
|
|
|
|
|
|
Print this Story
