Sales remain flat on High Street

Tighter household budgets are affecting retail sales, the BRC says

The small sales growth seen in the UK High Street in May was just a start-of- summer blip, according to the British Retail Consortium (BRC).

The BRC said retailers failed to hold on to the sales lift in June as tighter household budgets and fluctuating weather kept shoppers away from stores

Like-for-like retail sales fell 0.4% compared with June 2007. Total sales, which include new stores, rose 2.1%.

Sales of food were up, but against the suppressed sales of a wet June in 2007.

Food and drink was the only sector to show significant growth, the BRC said.

Clothing and footwear sales were the biggest losers, with furniture and homewares slipping further below the previous year's levels.

'Challenging environment'

"Consumers are managing their budgets carefully and the food retailers continue to focus on keeping consumer prices down through high-profile promotional activity, despite the increase in oil and commodity prices," said Helen Dickinson, head of retailing at KPMG.

"This environment is a hugely challenging one for retailers - for the food retailers with their own costs continuing to rise, and for non-food retailers trying to win back a greater 'share of wallet'," she added.

Heavy discounting

Underlying High Street sales have now been lower than a year ago for three of the past four months.

Clothing sales fell back below the prior year after the growth of May, with more spent on basic essentials and smaller accessories rather than discretionary spending.

Childrenswear outperformed menswear and womenswear.

Footwear sales dropped back despite widespread and heavy discounting.

Sales of furniture, flooring and homewares were "well below" year-earlier levels, but computer game and console sales remained strong.

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