UK retail growth falls to 0.2%
Rising costs and consumer uncertainty cited as key factors
Growth in Britain’s retail sector stalled in July, with high prices and consumer anxiety taking their toll.
New figures from the Office of National Statistics (ONS) revealed that overall retail sales grew by only 0.2% last month. This increase is considerably lower than the 0.8% recorded in June, and falls short of the 0.4% growth which had been predicted by economists. A number of sectors performed particularly badly during July, with sales of household goods, clothing and footwear all declining. The fall in growth is being attributed to rampant consumer price inflation, which reached 4.4% in July, and a widespread reluctance to part with cash. With unemployment now standing at almost 2.5 million, and many fearing a new economic downturn, times are tough for retailers of all sizes.
Small businesses fear closure
July saw a cluster of major high street brands, such as Habitat and Jane Norman, run into serious trouble, and smaller businesses are faring little better; in fact, a report earlier this month claimed that 60% of small retailers fear closure because of rising overheads. Stephen Robertson, director general of the British Retail Consortium, said that “customers’ ability to spend is being squeezed by rising costs, particularly utilities and low wage rises. “Global economic fears are mounting. Policymakers … must act quickly to implement a coordinated and credible strategy to reduce public sector deficits while supporting growth. Business and consumer confidence needs to be restored quickly.”