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Sales suffer worst decline since 1995, says BRC

Published: 12 April 2011
UK retail sales have suffered the worst decline for 16 years, according to the latest BRC-KPMG Retail Sales Monitor.
Sales suffer worst decline since 1995, says BRC
Total sales values last month fell 1.9% compared with March 2010, when sales rose 6.6% boosted by Good Friday and Easter Sunday falling in the March trading period. On a like-for-like basis sales were 3.5% lower, against a 4.4% increase in March last year.

"This is the worst drop in total sales since we first collected these figures in 1995," said BRC director general Stephen Robertson. "Non-food retailers were particularly hard-hit. This is strong evidence of the pressure customers and traders are under. This year's later Easter is a factor but this fall goes way beyond anything that can be explained by that alone."

The organisation said consumer uncertainty over jobs and incomes, as well as the late Easter, hit both food and non-food sales, with big-ticket home and furniture purchases suffering the most.

Sunny weekends in March helped gardening and outdoor DIY, although underlying trade continued to struggle and larger projects were hit by consumer caution. Garden care, plants and supplies picked up in the mild weather, with an early start to power tools and lawnmowers for some.

Home accessories and textiles showed their largest declines for two years, with customers delaying discretionary purchases and concentrating on core essentials. Furniture and floorcoverings sales fell further below their year-earlier level, despite increased discounts and promotions. Fitted kitchens and bathrooms suffered, also hit by people waiting for Easter promotions.

Mr Robertson continued: "Uncomfortably high inflation and low wage growth have produced the first year-on-year fall in disposable incomes for thirty years... The next interest rate decision is a difficult balancing act for the Bank of England but, for now, supporting our weak economy must be the priority. Inflation is coming mainly from temporary and external price shocks - VAT, world commodity prices and the weak pound - not wage or consumer-driven increases. Increasing interest rates would do more harm than good."

Non-food non-store sales growth also fell further in March. While sales were 7.5% higher than a year ago, this is the smallest increase since October 2008 and much weaker than the 10.4% rise in February, said the report.

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