High-street retailers slash prices to defend volume sales

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The Independent Online

High street retailers slashed their prices last month in an attempt to claw back some of the sales lost in post-Christmas sales, official figures showed yesterday.

High street retailers slashed their prices last month in an attempt to claw back some of the sales lost in post-Christmas sales, official figures showed yesterday.

Retail sales volumes posted an unexpected rise of 0.5 per cent in April, the Office for National Statistics said, confounding City forecasts for another fall. However it cut its estimate for March sales to a 0.3 per fall cent, leaving growth over the past three months at a two-year low of 2.7 per cent.

The actual value of sales passing through high street tills fell last month for the first time in almost 40 years. Shops took £18.3bn in the month, 0.1 per cent down on April 2004 and the first fall since May 1967, the Office for National Statistics said.

The ONS said prices were almost 1 per cent lower than a year ago, showing that the gain in sales had been achieved only by sacrificing profits through a savage round of price cuts.

Nick Palmer, the ONS's statistician, said: "Underlying retail sales growth has remained significantly lower than the ... levels seen in the first half of last year."

Analysts said the recovery belied the true state of the high street but would be enough to stop the Bank of England from launching an imminent cut in rates.

The rise in volumes contradicted evidence from the British Retail Consortium and the CBI that pointed to the worst April for a decade. But the Treasury said the figures pointed to a robust economy. "Consumer confidence remains above its long-run average and the labour market remains strong as shown by Wednesday's figures," a spokesman said.

The worst casualties were department stores, who saw their sales volumes slump 3.4 per cent on the month, its biggest drop for almost seven years. It echoed the gloomy trading updates given by stores including John Lewis.

There was more downbeat news from a CBI survey of small manufacturing companies showing that output, orders and employment fell over the latest quarter.

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