Retail sales in show of resilience

12 April 2012

Retail sales figures revealed an unexpected resilience on Britain's battered high street, but firms were still warned to expect a bleak Christmas.

The Office for National Statistics (ONS) said sales fell by 0.4% in September, which confounded expectations for a far steeper drop amid the wider economic turmoil.

However, September's fall brought the annual rate of growth down to 1.8% - its weakest for two-and-a-half-years - and experts cautioned that conditions were set to get tougher.

Currys parent DSG International said it was "preparing for a poor Christmas" as it posted a 7% fall in half-year sales.

Sports World owner Sports Direct International added to the gloom, saying the trading environment continued to be the hardest it had ever seen.

But shoppers have yet to significantly tighten their belts in spite of the credit crunch and uncertainty caused by the global financial crisis, according to ONS statistics.

Economists had been expecting a sales fall of as much as 1% in September and had also been surprised by figures for July and August, when retail sales rose by 0.9% and 1.1% respectively.

Ross Walker, economist for the Royal Bank of Scotland, said recent steep increases in unemployment suggest worse is to come for retailers. He said: "Overall, retail sales have continued to prove a little more resilient than expected, but the more formidable challenge - stemming from accelerating unemployment - is still to come."

Recent survey results from the British Retail Consortium (BRC) and business body the CBI have painted a more grim picture of Britain's high street trading conditions. Like-for-like sales fell 1.5% in September and have been down in six of the last seven months, according to the BRC's figures last week.

The CBI's poll of retail firms last month also showed a sales fall for the sixth month in a row.

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