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BDO: High street retail sales dropped 0.9% in March

The unseasonably cold weather in March damaged sales on the high street and has increased the prospect of Britain entering a “triple-dip” recession, according to new data.

The latest high street sales tracker from accountancy firm BDO shows that like-for-like retail sales in the UK fell by 0.9pc in March compared with the previous year.

This decline was caused by a sharp drop in fashion sales as shoppers shunned new spring and summer lines because of the low temperatures.

Clothing sales slid 3.4pc in the month, more than offsetting a 7.3pc upturn in non-fashion sales thanks to a surge in purchases of homeware and kitchenware for Mother’s Day presents.

The problems caused by the cold weather have already been demonstrated by department store chain Debenhams, which issued a profits warning after snow in January, while Marks & Spencer is this week expected to report a fall of up to 6pc in like-for-like clothing sales for the past three months.

Don Williams, head of retail and wholesale at BDO, said: “Retailers that failed to adjust stock levels and the supply chain accordingly were already on the back foot when the mercury dropped and will now have to work extra hard to catch better prepared rivals.

“People remain cash-strapped so their natural instinct is not to spend unless given a good reason.

"A product consumers like, with a strong focus on value, price and service is no longer enough, they also need an occasion like Mother’s Day, Easter or the school holidays to give them that final nudge.”

The slowdown in high street sales harms the UK’s chances of avoiding a second consecutive quarter of contraction, which would mark a triple-dip recession.

But BDO provided some hope to the economy after its employment index, which measures the intentions of companies to hire staff, reached the highest level for 19 months. The index hit 96 in March, with anything above 95 indicating employment growth.

Source : Graham Ruddick – The Telegraph
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9977561/High-street-sales-fall-0.9pc-after-second-coldest-March-on-record.html

08 April 2013
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