Retail sales continue to fall; but better compared with September |
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Wed, 09 Nov 2005 02:35
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LONDON: Retail sales in Britain fell for the seventh month in October, according to the British Retail Consortium (BRC). Sales in stores fell 0.2 per cent from October last year. There was a 0.8 per cent decline in September. Total sales, which include new floorspace, however, rose 3.7 per cent, marking the sixth consecutive month of annual increases and the strongest increase since March.
London-based BRC, which has some 80 per cent of British retailers as members, said companies like discount clothing retailer Matalan Plc. continued to have shaky sales in spite of the August interest rate cut. It said consumer spending had slowed after the five interest hikes through August last year. The increasing oil prices too had affected the spending power of people.
Kevin Hawkins, director general of BRC, said many stores are relying on discounts and promotions to attract value-conscious consumers.
Matalan and another clothing retailer Philip Green have said the prevailing mild weather had affected sales in the last two months. The demand for warm clothes is yet to pick up.
Retail sales make up around 40 per cent of consumer spending. One encouraging factor, according to BRC, is that overall sales decline was less than last month. Revenue at food stores increased as the warm weather generated stronger demand for salads and ice cream.
Sales of big-ticket items like televisions were weak, with consumers opting for small items and essentials. Even furniture and carpet sales were affected due to the weak housing market.
A report from the Confederation of British Industry showed last week that retail sales volumes fell less compared with a year ago than retailers and economists had forecast.
Official September retail sales figures showed a 0.7 per cent increase, almost double the figure expected by analysts.
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Rate cut expected, demanded in the week ahead 