Consumer Spending Falls

The month of April saw a slide in UK consumer confidence, as was confirmed with the monthly British Retail Consortium/KPMG sales monitor showing that many shoppers are avoiding all but the most essential purchases.

The figures show retail sales in the UK in April down by 4.7 per cent on a like-for-like basis, and by 1.3 per cent on a total basis, compared with a year ago. While the figures were affected by comparisons with April 2004, which included Easter, the wider trend also makes grim reading.

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The three-month trend rate of growth fell to minus 0.9 per cent from 0.7 per cent in March for like-for-like sales, and to 2.6 per cent from 4 per cent for total sales. Trade worsened across the board but especially for discretionary purchases and non-essentials. Consumer caution and the slowing housing market continued to hit sales of big-ticket items, particularly white electricals and furniture. Younger fashion clothing and footwear saw a boost when the sun shone but trade overall was tough.

Sales worsened markedly, with declines for women’s, men’s and especially childrenswear. Sales overall were hit by the cold weather and consumer caution: accessories and smaller items often did better than major purchases, though there were a few good sales of men’s suits in promotions. Men’s polo shirts were also popular.

In womenswear, younger fashions sold better than older classic styles, but for most, spring ranges were only favoured on the few warmer days. Accessories were strong, especially handbags, belts and large ethnic-type jewellery. Footwear sales fell sharply across the board, hit by the unseasonably poor weather and Easter falling earlier this year. Department stores suffered also, but were helped by promotions and discount days and a little sun.

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