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Retailers see no respite from weak trading

Retailers predict "tough" trading conditions on the high street will continue into next year, after they posted a sixth consecutive month of anaemic sales growth in October.

Fragile consumer confidence continued to hit clothing and footwear chains, as well as retailers of big-ticket items, last month, although rising food price inflation helped grocers to deliver low growth.

Underlying retail sales grew at an annual rate of 0.8 per cent in October, according to the monthly British Retail Consortium and KPMG survey.

Helen Dickinson, the head of retail at KPMG, said: "This [sales rise] reflects increases in shop prices, which are now rising at their highest rate since January, rather than volume changes. This is mainly due to commodity price rises being passed on."

While the figure represented a slight improvement on the 0.5 per cent growth in September, UK retail sales have bumped along the bottom over the past half-year, with the 1.2 per cent growth in June being the highest since the end of March.

Industry experts expect the squeeze on consumer spending to remain for the foreseeable future in the wake of VAT going up to 20 per cent in January and a bloodbath for jobs in the public sector next year.

Stephen Robertson, the director general of the BRC, said: "Tough trading conditions are unlikely to change in coming months."

Perhaps surprisingly, 84 per cent of consumers still think that the economy is in recession, while 26 per cent say they have no spare cash, according to a separate BRC Nielsen Consumer Confidence Survey.

In further gloomy news yesterday, footfall into non-food shops fell by 3.4 per cent in October, according tothe research firm Synovate. Thiswas the first time that footfall figures have fallen for 12 consecutive months since Synovate established the study in 1998.