June 7, 2005

High Street sales continue to decline

by brian_turner

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A report from the British Retail Consortium (BRC), shows that same-store sales declined by 2.4% in May, compared with a year ago, causing concern that a “consumer-led recession” could be imminent. However, total sales - including new store openings - increased by 1.4%.

The figures caused UK retailers to call on the Bank of England to reduce interest rates from its current rate of 4.75%. BRC director general, Kevin Hawkins, said “We urge the Monetary Policy Committee (MPC) to reduce interest rates at this week’s meeting”.

The MPC increased rates five times between November 2003 and August 2004, as part of a strategy to slow the UK housing market and consumer borrowing.

A number of major retailers have reported a decrease in sales. On Tuesday, Woolworths announced a 4.4% decline in like-for-like sales in the 18 weeks to 4 June and said that trading conditions remained difficult.

According to Mr Hawkins, the slow-down in the housing market affected sales of household and high-priced items during May, but sales of furniture and carpets were better than for April. Sales of clothing and footwear and department store sales were slow.

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