Weak clothing sales were behind the fall
|
UK retail sales fell more sharply than expected in July, according to official figures, as the wet weather hit sales of clothing.
The Office for National Statistics (ONS) said High Street sales dipped by 0.4% in July from a month earlier.
Experts said the fall may also reflect the end of Euro 2004 and that interest rate rises are beginning to bite.
However, the ONS figures showed underlying sales remained strong, up 1.8% in the three months to July.
Sales were up 6.6% on the same period last year.
Feeling the pinch?
The ONS said the wet summer weather had hit clothing sales hard, with clothing and footwear sales down 2.7% in July from June - the biggest fall since September 2002.
Earlier on Thursday, sportswear retailer JJB Sports issued a profit warning after the poor weather led to poor sales of T-shirts and shorts.
 |
Overall, the fundamentals for consumption remain good
|
However, perhaps as a result of Britons spending the summer indoors, furniture and DIY sales were higher.
Total household good sales rose 1%, which the ONS said may have been helped by heavy discounting during the sales.
Overall, non-food stores saw sales decline 0.5%, while food sales dropped 0.2%.
Recent research from the British Retail Consortium (BRC) found that consumer spending growth slowed for the second consecutive month in July.
The BRC said the slowdown was due to shoppers feeling the pinch from a series of interest rate rises by the Bank of England.
Strength remains
Despite the ONS figures being worse than expected, experts said there was still evidence of buoyancy on the High Street.
"I think all the factors which have supported consumption over the past couple of years remain pretty much in place," Commerzbank economist Peter Dixon said.
"The housing market is still solid, employment is still strong and wages are picking up slightly. Overall, the fundamentals for consumption remain good."
Meanwhile, James Knightley of ING added that as the weather played such a big part in the fall it was "too
early to say" whether a consumer slowdown was happening.
~RS~q~RS~~RS~z~RS~21~RS~)
One-Minute World News
News services
E-mail this to a friend
Printable version
