UK retail sales slump as shoppers balk at higher prices and cold weather

ONS said food shops were the worst affected as retailers reported a 1.3% decline in the amount of goods sold

Retail sales slumped in April after shoppers balked at rising prices and were reluctant to venture out to the high street in one of the coldest springs on record.

The Office for National Statistics said retailers reported a 1.3% decline in the amount of goods sold, with food shops the worst affected. Sales of food plunged 4.1% on the month, the weakest showing in almost two years. Shops also suffered a 0.2% contraction in the amount of money spent on the same month a year ago, which was the biggest year-on-year fall in retail spending since the turn of the century.

The cold weather was the biggest factor as the sale of barbecue food, garden furniture and summer dresses was put on hold. April was also a terrible month for garden centres following the big chill that effectively delayed spring by a month.

Cold weather was the biggest factor as the sale of barbecue food, garden furniture and summer dresses was put on hold

Several major stores have announced a significant bounce back in May, with garden centre sales reportedly up 70% in the first three months of the year, but the overall contraction, and especially the deterrent of rising food inflation, will concern the Treasury.

Ministers are hopeful of a bounce back in consumer confidence during 2013 to increase high-street sales and boost economic growth.

The ONS said consumer prices data showed that food prices had steadily been increasing and that a wide variety of food types contributed to the rise, including staple goods.

"This rise in prices will have squeezed consumers' disposable income, possibly resulting in them buying less or substituting cheaper goods for their normal purchases," it said.

Chris Williamson, chief economist at financial data provider Markit, said the weather-related drop in sales was a reminder that the economy remains in a fragile state.

"It is likely that spending will revive again in coming months, helping keep the country out of another downturn, though recovery will be only gradual as incomes continue to be squeezed," he said.

He pointed out that the underlying picture was more likely one of modest growth of sales following a 0.7% rise in the latest three months sales on the previous three-month period, which was the strongest rate of increase since last September.

"Households' views on their finances are the brightest for three years, according to Markit's household finance index for May. Being busier at work, rising house prices, news of the country having avoided another recession and buoyant equity markets have all helped generate more of a 'feel-good factor'."

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Article source : http://www.guardian.co.uk