Retail sales figures being damaged by competitive high street discounts
New figures from the Office for National Statistics (ONS) have shown that retail sales failed to rise as much as analysts had predicted.
Retail sales plummet
Sales rose by 2.6% in July, up just 0.1% from June, which is a notably less than the 0.4% month-on-month increase that was estimated.
The ONS are accrediting the downward trend to non-store retailing and fuel.
Prices in stores dropped by 0.9%, which is a demonstration of the continuing price war taking place on the high street.
Food stores also experienced a 1.3% decline in July, which was the first year-on-year decline since 1989.
UK head of retail at Deloitte Ian Geddes, said:
“Many consumers are yet to feel the benefits of the economic recovery and are reluctant to let go of their recessionary behaviours, particularly when shopping for food.”
Managing director of the Lloyds Bank retail sector Keith Richardson has expressed concerns with regards to supermarket discounting. He said that these reduced prices may benefit customers in the short term but may be seriously damaging to total retail sales this year.
“England’s early exit from the World Cup also deprived the grocery sector of a much needed fillip.”
Samuel Tombs, senior UK economist at Capital Economics, championed high consumer confidence and claims that falling inflation would allow wages to rise before the end of the year:
“The recovery in consumer spending should maintain its strong pace over the coming months.”
According the the BBC, the ONS found that “for every pound spent in July the retail industry, 42p was spent in food stores; 41p in non-food stores; 6p in non-store retailing; and 11p in service stations on fuel.”