Press Room
Retail spending downturn continues despite strong headline
increases for three months to March 2008
If you are writing on today's ONS Retail Sales
statistics, please consider the following comment from David Bush,
Head of Grant Thornton's Retail Services Team.
According to the ONS retail sales statistics, retail sales grew
by 2.0% for the three months to March compared to the previous
quarter, apparently indicating that the high street has experienced
stronger than expected growth, despite fears of a consumer spending
slowdown.
"These results are a surprise at first look and appear to
contradict what the BRC and the CBI have reported in their most
recent retail sales results. However we need to remember that
Easter fell this year in March which appear to have artificially
boosted the sales increases quarter on quarter", says David Bush,
Head of Retail Services at Grant Thornton.
"A more realistic measure of the current state of consumer
confidence is the overall 0.4% fall in the adjusted volume of
retail sales between February and March which was the biggest fall
since January 2007. Additionally the equivalent month on month fall
in sales volumes of non food sales was 0.7% which was also the
biggest drop since January 2007," he continues.
"This month on month result not only confirms the downturn
spelled out by Grant Thornton's recent survey of the FTSE listed
retailers trading updates, but highlights that non food retailers
(particularly those operating in the housing market and those that
sell high ticket or discretionary products) are especially
struggling."
"April's cut in interest rates will have come too late to have
had an impact on today's figures. Additionally,
it's doubtful whether this rate cut will be sufficient enough to
offset the adverse factors such as rising food prices and domestic
fuel bills, and the restriction by the banks of
unsecured lending which are causing consumers to rein in their
spending", he concludes.