Figures rise but retail sales struggle

The struggle on the high street was underlined today as official figures revealed a greater-than-expected slowdown in retail sales.

Retail sales volumes increased month-on-month by 0.2% in July, compared to a revised 0.8% boost in June, the Office for National Statistics (ONS) said. Economists had expected a 0.4% rise.



Household good stores, clothing and footwear shops, and non-store retailing, which includes internet and mail order sales, all suffered as cash-strapped consumers reined in their spending.



The retail sector has suffered at the hands of a squeeze on household budgets - driven by muted wage growth and high inflation, which was 4.4% in July, up from 4.2% the previous month.

Retailers have had a torrid year with the likes of fashion chain Jane Norman, interior designer Habitat and wine merchant Oddbins falling into administration, while Mothercare, entertainment group HMV and chocolatier Thorntons have all announced store closures.

The ONS said there was evidence that retailers had brought in their summer sales earlier than usual, in May or June, to entice frugal shoppers.



But there was not enough evidence to suggest chains had dragged the sales season on in July as volumes suffered, the ONS added.



Clothing and footwear stores posted a 0.3% drop in sales volumes between June and July, while household goods stores also saw a 0.3% decrease.



Household goods stores, such as Comet, have been among the worst-hit retailers during the spending squeeze as consumers forego purchases of big-ticket items such as fridges, TVs and cookers.



Non-store retailing, which includes internet, mail order and market stall sales, saw sales volumes drop 0.9% month-on-month.



The sub-sector has seen strong growth over the year - with volumes up 16.9% compared to July 2010 - and the ONS put the drop-off in volumes down to a particularly strong performance in June.



Internet and mail order shopping is generally cheaper and consumers have more control over their total spend, as the temptation of impulse purchases is removed, the ONS added.



Internet sales in July amounted to £523.4 million, compared to £395.8 million in the same month last year.



Food stores propped up overall sales volumes in the period, with growth of 0.7% as supermarkets slashed prices to boost trade.



Elsewhere, sales volumes were flat compared to July last year, while sales values increase 0.8% month-on-month and 4.3% year-on-year.

Chris Williamson, chief economist at financial services information company Markit, said weak spending in the third quarter heightened the risk of a double-dip recession.

He said: "People are worried about job security, and incomes are being squeezed by higher prices. After inflation, real take-home pay is falling by over 2% per annum."



He added: "With consumer spending accounting for around two-thirds of the economy, the weak retail sales data suggest that economic growth remained very subdued at the start of the third quarter and highlight how close the UK economy is to sliding back into recession."



Samuel Tombs, UK economist at Capital Economics, said any growth was a relief given the squeeze on household incomes.



But he added: "Looking ahead, we doubt that retail sales will continue to rise given the recent sharp falls in consumer confidence, increases in unemployment and intensifying squeeze on consumers' real incomes."

News
The Banksy image in Folkestone before it was vandalised
people
Life and Style
tech

Sales of the tablet are set to fall again, say analysts

Sport
football West Brom vs Man Utd match report: Blind grabs point, but away form a problem for Van Gaal
Arts and Entertainment
Gotham is coming to UK shores this autumn
tvGotham, episode 2, review
PROMOTED VIDEO
News
i100
Arts and Entertainment
Bloom Time: Mira Sorvino
tvMira Sorvino on leaving movie roles for 'The Intruders'
News
First woman: Valentina Tereshkova
peopleNASA guinea pig Kate Greene thinks it might fly
News
Brian Harvey turned up at Downing Street today demanding to speak to the Prime Minister
news

Met Police confirm there was a 'minor disturbance' and that no-one was arrested

Arts and Entertainment
George Lucas poses with a group of Star Wars-inspired Disney characters at Disney's Hollywood Studios in 2010
films

George Lucas criticises the major Hollywood film studios

Voices
Chris Grayling, Justice Secretary: 'There are pressures which we are facing but there is not a crisis'
voices

Does Chris Grayling realise what a vague concept he is dealing with?

News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
A street vendor in Mexico City sells Dorilocos, which are topped with carrot, jimaca, cucumber, peanuts, pork rinds, spices and hot sauce
food + drink

Trend which requires crisps, a fork and a strong stomach is sweeping Mexico's streets

Life and Style
The charity Sands reports that 11 babies are stillborn everyday in the UK
lifeEleven babies are stillborn every day in the UK, yet no one speaks about this silent tragedy
News
Blackpool is expected to become one of the first places to introduce the Government’s controversial new Public Space Protection Orders (PSPOs)
news

Parties threaten resort's image as a family destination

Life and Style
Northern soul mecca the Wigan Casino
fashionGone are the punks, casuals, new romantics, ravers, skaters, crusties. Now all kids look the same
Life and Style
gaming

I Am Bread could actually be a challenging and nuanced title

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Customer Service Executive / Inbound Customer Service Agent

£18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...

ASP.NET Web Developer / .NET Developer

£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....

Operational Risk Manager - Asset Management

£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...

Project Coordinator - 12 month contract

£27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...

Day In a Page

Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

Salisbury ranked seventh in world’s best tourist cities

The city is home to one of the four surviving copies of the Magna Carta, along with the world’s oldest mechanical clock
Let's talk about loss

We need to talk about loss

Secrecy and silence surround stillbirth
Will there be an all-female mission to Mars?

Will there be an all-female mission to Mars?

Women may be better suited to space travel than men are
Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

'They poured water on, then electrified me...'

If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
James Wharton: The former Guard now fighting discrimination against gay soldiers

The former Guard now fighting discrimination against gay soldiers

Life after the Army has brought new battles for the LGBT activist James Wharton
Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

Panic over Ebola threatens to infect the midterms

Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
Premier League coaches join the RSC to swap the tricks of their trades

Darling, you were fabulous! But offside...

Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

How to dress with authority

Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

New book on Ian Curtis sheds fresh light on the life of the late singer

'Joy Division were making art... Ian was for real' says author Jon Savage
Sean Harris: A rare interview with British acting's secret weapon

Sean Harris: A rare interview with British acting's secret weapon

The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

Tim Minchin interview

For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
Boris Johnson's boozing won't win the puritan vote

Boris's boozing won't win the puritan vote

Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

Tim Wheeler: Alzheimer's, memories and my dad

Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album