Retail sales rose on the year for the fourth month running, but a pressure group for the sector has warned that high streets are still feeling the squeeze.
Latest figures from the British Retail Consortium (BRC) show that like-for-like sales increased 0.6% in February over the same period last year. However, this is a weak comparative, the BRC warns, as February 2005 witnessed a fall of 0.5% in sales volumes.
Likewise, the data follows a poor showing in January in which shop owners recorded just a 0.2% bump despite an abundance of New Year’s sales and promotions.
February figures were also helped by a strong Valentines Day performance on the high streets.
Industry leaders claim that suggestions of a recovery from last year’s slump are premature.
“These results underline yet again the continuing squeeze on consumer spending and, contrary to the Bank of England’s expectations, there is no sign of an upturn,” said Kevin Hawkins, director general of the BRC.
“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. Meanwhile the industry’s fixed-cost base continues to rise well above the general rate of inflation. Shop price inflation, in contrast, remains around zero.”
Helen Dickinson, head of retail at KPMG, added: “If retailers are continuing to struggle, this should send out an even starker warning for the health of their suppliers who will find the going even tougher as retailers inevitably look to make further cuts to their supplier cost base."
Data shows three-month rate of growth in the sector also picked up, rising from 3.6% to 4.2% in February, which the BRC attributes to a continued increase in retail space.
Overall, consumer confidence remains low, as shoppers remain concerned about personal finances, the BRC said. Many are still mired in a winter mindset, which has kept spring and summer ranges from getting off to a strong start.
