Sales of 'big ticket' goods fall for first time in decade

Spending on "big ticket" goods such as fridges and televisions, widely seen as a barometer of the health of the UK consumer, fell last month for the first time since the mid-1990s, a leading research firm said yesterday.

Sales of consumer durables in February were about 1 per cent down on a year ago as spending on DVD players fell for the first time their launch in 1997, GfK said.

The figures came as a closely watched survey by the British Retail Consortium showed high street sales rose 0.6 per cent compared with a year ago. It was the fourth consecutive monthly rise but fell short of the 1 per cent expected by City economists.

There was further gloom as new car sales fell again last month to take the annual decline to 9.7 per cent, the Society of Motor Manufacturers and Traders said.

GfK said its data from the major retail chains showed sales fell at an annual rate of 1 per cent. Once independent stores are included, the fall could be even greater.

James Randall, its commercial director, said while sectors such as DIY and domestic appliances had suffered a fall last year as the housing market slowed, this had been offset by strong growth in consumer electronics. "We are now seeing consumer electronics, that showed double-digit rates last year, now in decline. Short term that's a worry, although the long-term outlook should be OK."

He said this summer's football World Cup should trigger sales of fridges and plasma-screen televisions, while the expansion of wireless technology should spur IT purchases.

The BRC said its figures showed a "continuing squeeze on consumer spending". It said the 0.6 per cent rise in like-for-like sales - measuring shop space open a year ago - was magnified by a fall in February 2005.

Kevin Hawkins, its director general, said: "Reports of a recovery in the housing market have yet to work through to the 'big ticket' product categories."

Helen Dickinson, the head of retail at KPMG, which jointly produced the report, said retailers had been hit by rising costs, especially those related to property. "The reason that retailers are squealing is that their cost base is rising faster than their sales."