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Government urged to back shops

09:42, 08 March 2011

Shoppers out in force. File picture
Shoppers out in force. File picture

by business editor Trevor Sturgess

The Chancellor has been urged to back shops after weak sales in February.

The British Retail Consortium has written to George Osborne, urging him to use his March 23 Budget to support retail's "essential contribution to jobs and growth by avoiding new burdens and removing existing ones."

Figures from the BRC and KPMG show that like-for-like sales were down 0.4 per cent but total sales were 1.1 per cent higher, the poorest since May 2009.

Food sales picked up after a weaker January but non-food sales slowed sharply. Uncertainty about jobs and incomes hit clothing, footwear and homewares. Big-ticket purchases suffered most.

Non-food non-store (internet, mail-order and phone) sales growth fell further in February, although still 10.4 per cent higher than a year ago.

George Osborne, Conservative shadow chancellor
George Osborne, Conservative shadow chancellor

Stephen Robertson, BRC director general, said: "Apart from a bit of help from half-term for some retailers, February's sales were weak. Other than the negative figures last April (caused by the year-to-year movement of Easter), this February's 1.1 per cent total sales growth is the poorest since May 2009 - even poorer when the impact of the VAT rise on inflation is taken into account.

"After the big boost to January's figures from one-off factors, including a strong final burst of pre-VAT rise spending, February's figures are a return to a more realistic picture of how things are for customers and retailers."

Helen Dickinson, head of retail at KPMG, said: "February was a continuation of the trend seen in the latter part of January, with struggling non-food sales highlighting consumers' caution over the outlook.

"Food performed better than the previous month boosting the overall results slightly but furniture, home and women's clothing all had a poor month. Consumers are re-adjusting their spending habits to reflect the reduced disposable income in their pockets and the key question for retailers is whether they have finished yet."

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