Consumer Caution Continues to Hit UK Retail Sales – BRC

The numbers from the Office for National Statistics show the weakest growth in sales values so far this year, barring Easter distortion, which confirms the underlying trend from the BRC's own statistics.

6/17/2011 --- Official retail figures published confirm British consumers are still reluctant to spend and that tough months lie ahead for the retail sector, the British Retail Consortium (BRC) said. The numbers from the Office for National Statistics show the weakest growth in sales values so far this year, barring Easter distortion, which confirms the underlying trend from the BRC's own statistics.

British Retail Consortium Economist, Richard Lim, said: "After the feelgood boost of April, which saw retailers benefiting from sunny weather and bank holidays, May was a return to reality. Consumers are overwhelmingly cautious about their personal finances and are reluctant to spend, particularly on big ticket items. Uncomfortably high levels of inflation and low wage growth continue to squeeze households' disposable income while job security remains a key concern.

"While demand remains weak, retailers are also being hit by surging commodity prices, property and employment costs. Sales are being driven by promotions and special offers at the cost of profit margins. Consumers are postponing the purchase of non-essential items.

"A return to sunny weather through the summer may provide another lift to retail sales, but it will take more than the holiday season to fix the underlying problem of low consumer confidence."