Cash-strapped shoppers desert the high street and the housing market

8th March 2011

Shoppers deserted the high street in February as the VAT hike began to bite.  

High street spending fell 0.4% in February compared with the same month last year in a marked reversal of the 2.3% bounce seen in January after the pre-Christmas snow chaos, the British Retail Consortium (BRC) said.

The year ahead is likely to be difficult for retailers according to The Guardian.

Furniture headed the list of costly goods shunned by shoppers, it said.

The British Chamber of Commerce (BCC) downgraded its estimate of growth this year to 1.1%, half the 2.2% predicted by the government's independent fiscal watchdog, the Office for Budget Responsibility.

On The Telegraph  it reported that high street sales should be compared with 2009, because of the date-related impact of an earlier Easter in 2010; however even when taking that into account the sales figures were still the poorest monthly performance since May 2009. 

Back on The Guardian, the surveyors' trade body RICS added to the gloom. It said estate agents struggled to find anyone interested in buying a home in February, especially outside the south-east and that sales remained at historic low.

However a report from Manpower, the recruitment firm, said two years of "horrendous cuts" in banking jobs had come to an end with positive signs of hiring in February.

 Helen Dickinson, head of retail at KPMG, was reported on The Telegraph as saying: "February was a continuation of the trend seen in the latter part of January, with struggling non-food sales highlighting consumers' caution over the outlook."

"There is inflation in these numbers, so volumes are lower and with people making less shopping trips, fewer retailers are benefiting from the limited spending capacity available," she said.

Readers who posted on comment boards  were not surprised by the data.

On The Telegraph marwood posted: "This data is completely in line with what one would expect. Cost push inflation is subduing demand, increases in oil and food prices combined with wage restraint are having a brake effect on spending.

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