UK retail sector continues to struggle; Feb sales below expectations - BRC
Tuesday, March 7, 2006 12:16:34 AM
afxpress.com
LONDON (AFX) - The UK retail sector continued to struggle in the new year with sales in February rising only modestly after a disastrous January, a leading retailing lobby group said
In its monthly survey, the British Retail Consortium said like-for-like sales, which strip out the impact of changes in floor space, climbed 0.6 pct from last February against expectations of a 1.0 pct improvement. Additionally, the rise in February comes on the back of a weak comparison with the same month in 2005, when sales actually registered a fall
BRC said that in Feb, the spring/summer ranges of items had a slow start, with footfall down and consumers often still in a winter mind-set
Clothing and footwear found some demand in the final week of the month but performances were far from strong. Food sales meanwhile, improved, helped by Valentine's day, after a flat January. "With consumer confidence still weak amid concerns about personal finances, shoppers remain wary of committing to larger housing-related purchases," the BRC said
Kevin Hawkins, Director General of the BRC, said the survey underlines yet again the continuing squeeze on consumer spending
"Contrary to the Bank of Englands expectations, there is no sign of an upturn. Reports of a recovery in the housing market have yet to work through to the big-ticket product categories, which have been depressed for the past 15 months," he added. Indeed, the data casts some doubt if the BoE's rather rosy predictions for consumer spending will be proven correct. If anything, the latest results will go some way to rekindle UK rate cut expectations. Over the past few weeks markets have been scaling back rate cut expectations after some strong economic indicators and hawkish rhetoric from the central bank
The survey also showed that total sales in February rose 3.5 pct from a year ago compared with 3.4 pct in Jan
The three-month trend rate of growth, meanwhile, weakened in February to 0.9 pct from 1.1 pct in January for like-for-like sales, but rose to 4.2 pct from 3.6 pct for total sales, reflecting the continued growth of retail space |
