Retail sales figures released by ONS

The Office for National Statistics has recently released figures showing the growth levels of retail sales in the UK. The figures showed that retail sales were growing at their slowest annual rates for two and a half years. In September there was a 0.4% drop in retail sales on the High Street. This saw annual growth fall from 3.3% to 1.8%. However, analysts stated that the fall was not as severe as expected, with many having predicted a 0.9% fall.

According to a number of recent reports retail sales figures are expected to fall further as consumers rein in their spending further in the current financial climate. The expectation of consumer spending cuts has fuelled speculation over whether the Bank of England may be considering another half point base rate cut this month, and some officials have said that there could even be a cut of 1% in the base rate.

Many major retailers have reported significant drops in sales levels, which were highlighted in the report, and amongst those that have seen a fall in sales levels are DSG International (owner of PC World and Curry’s), Homebase, Argos, Marks and Spencer, Arcadia Group, JJB Sports, and others.

Gavin George, head of retail at Ernst & Young, said: “As we enter our first recession for 16 years, it goes without saying that times will remain incredibly tough for retailers over the remainder of 2008, and probably all of 2009. Christmas will be painful for much of the sector as consumers continue to batten down the hatches.”