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Weak retail sales cause concern

Weak retail sales cause concern

Category: Economy

Updated: 06/12/2011
First Published: 06/12/2011

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This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

People are keeping their cards and cash close to their chests in the run up to the festive season, sales figures show.

While the last few months of the year usually coincide with Britons splashing out on gifts and other Christmas items, the British Retail Consortium (BRC) has said that retail sales saw their weakest growth since May.

The figures reflect a hugely fragile economy, with people loath to splash out when inflation is so high, interest rates are low and many face uncertain employment prospects.

Food sales growth was little changed from October's five-month low, while non-food sales fell further below their year-earlier level, with sales largely promotion-led.

Clothing and footwear sales were hit by the mild weather, as well as by underlying uncertainty about jobs and incomes.

Consumer caution continued to hit big-ticket homewares and furniture purchases most.

Non-food non-store (internet, mail-order and phone) sales growth fell back in November after picking up in October.

Sales were 8.6% up on a year ago, the weakest since March and half the previous November's increase.

"There's a worrying lack of cheer in these figures. The weakest increase in sales for six months suggests consumers are keeping a tight rein on their spending, despite Christmas being so near," said Stephen Robertson, director general of the BRC.

"This November's mild weather contrasted with much lower temperatures last year, hitting sales of winter clothing and footwear particularly hard.

Consumers are not quite in the Christmas mindset yet, although stores are working to generate much-needed sales with high levels of festive discounting.

"Retailers hope that customers who've managed their finances carefully in recent months will still treat themselves and their families in December, unhampered by the severe weather which disrupted shopping twelve months ago."

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