The UK retail sales fell by 1.5% in April 2008 and clothing and food stores were the worst hit, says British Retail Consortium.

According to the British Retail Consortium (BRC), in April 2008, the retail sales fell consecutively second month by 1.5% following 1.6% drop in March 2008, as reported by THEINDEPENDENT.

While clothing and footwear stores experienced drastic fall in their sales last month, says BRC, food retail sales remained unaffected and even went up compared to March 2008 due to the passage of large proportion of increasing farm gate prices to consumers by retailers. The clothing, second largest sector of the UK retail industry, slumped in double digits, turning down the consumer spending to the lowest level recorded in spring of 2005.

The main factor for the successive decline in retail sales was inflating prices of consumers’ goods. Under intense pressure of escalating fuel prices and utility bills, consumers are increasingly going for essential food items. Moreover, the UK retailers were offering heavy discounts on clothes and footwear to attract consumers but they were not interested in making any purchase due to credit crunch and inflation. For the time being, people are only spending on food items and waiting for price fall in other products.

Furthermore, the slowdown in housing industry, decline in housing product sales and steep fall in electrical items also affected the retail sales last month as people withdrawn from spending on non-essential items.

Considering the weak economic fundamentals and tough trading conditions, the retail sales in future seem low. Hence, the UK retail sector will continue to witness the same situation in remaining period of the year. In addition, there are no indications of any relaxation in credit crisis and its impact seems to fall on the retail industry.

According to a research analyst at RNCOS, “Rising food and fuel prices are building pressure on people in the UK to avoid spending on non essential and non food items. The present crisis needs to be tackled with cooperative effort by the UK government and retailers to manage between food and non-food items under economic conditions. Discount on products and lower interest rates could help in attracting consumers.”

Related Market Research Reports:
Booming Retail Sector in India
Booming Retail Sector in UAE
Opportunities in Asian C-store Market