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Shoppers are continuing to curb spending, the British Retail Consortium said today, with most customers "concentrating on value and durability".
The BRC-KPMG Retail Sales Monitor, which measures changes in the actual value of retail sales, said like-for-like retail sales fell 0.9 per cent compared with July 2007.
Sales have now been lower than a year ago in four of the past five months.
Sales of food and drink were up, but compared with weak sales last year.
Stephen Robertson, director general of the BRC said: "Four of the last five months have now seen negative like-for-like annual sales growth and in July every sector except food recorded falls.
"Frivolous shopping is off the agenda as most customers concentrate on value and durability and there are few signs the slowdown has yet bottomed out.
"This is a good time for consumers to take advantage of the wide range of discounts and promotions available to them."
Helen Dickinson, head of retail for accountants KPMG, said: "“July saw a continuation of June's trend, with food inflation and the wider economic climate continuing to impact consumer retail spending.
"As July 2007 was one of the worst performing months of last year, total sales growth of just 1.7% in July 2008 highlights how disappointing a month it was for all retail businesses.
"Although total retail sales and food sales grew compared to the same period last year, the non-food sector contracted for the second month in a row. The furniture and home-related sectors continue to bear the brunt of falling consumer confidence and increasing demands on household budgets.
"Women's footwear was the only highlight in the clothing and related sectors, perhaps suggesting a need for a personal treat in the midst of all the gloom.”
Recent figures for Kent's Bluewater shopping centre show sales for January to June 2008 rose by 0.1 per cent and footfall went up by 6.9 per cent compared to the same period last year.
Most of the money was spent on fashion and travel at the Greenhithe shopping venue.