Struggling retailers pour scorn on ONS's upbeat high street sales data

BRC says incomes are down and consumers are cutting back

A dispute over the state of the high street broke out yesterday as the British Retail Consortium accused the Office for National Statistics of producing sales figures that "paint an overly rosy picture" of shopping in the UK.

The ONS initially caused considerable pre-Christmas cheer yesterday, as its latest data indicated that the value of UK sales grew by 0.7 per cent in October, from September, and by an inflation-busting 5.4 per cent from the year before.

The Government's official statistics office put the surprise sales rise down to "pre-Christmas sales and in-store promotions", with supermarket wars helping push prices down by 0.4 per cent in October.

However, the British Retail Consortium dismissed the figures, arguing that they underestimated the extreme difficulties retailers are experiencing on the high street. To make matters worse, they implied conditions were improving, when they are actually deteriorating, said the BRC, which has a history of disputing ONS figures.

Stephen Robertson, the BRC's director general, said: "Most retailers won't recognise the overly positive picture being painted by these ONS results. The reality is disposable incomes are down on a year ago and customers are cutting back."

The BRC said its figures for October show that the value of sales grew by just 1.5 per cent, compared with the year before, "meaning customers are actually buying less when the impact of inflation is factored in".

Furthermore, yesterday's ONS figure represent an improvement on the 3.7 per cent year-on-year rise it recorded in September. But the BRC figures have gone the other way, with its October figure representing a decline on September's 2.5 per cent increase.

A BRC spokesman said: "We've had little spats with the ONS over figures before when they were similarly over-rosy. They have in the past been the target of scepticism and forced to justify their figures."

ONS declined to address BRC's attack, although a spokesman insisted the group stood by its figures.

Many in the industry were surprised, if not sceptical, by the ONS data, especially as it came just a day after the latest survey of consumer sentiment by Nationwide building society found confidence to the lowest level last month since the series started in 2004.

"The retail sales data certainly bodes well for fourth-quarter personal spending. However, we would not read too much out of the data as they clearly diverge from the overall picture," said an analyst at Newedge Strategy.

" Indeed the general outlook is set to remain sluggish," the analyst added.

Samuel Tombs, an analyst at Capital Economics, said: "October's official retail sales figures suggested that the intensity of the fiscal and inflation squeezes on consumers has not kept them away from the high street. But we doubt that the figures signal that the double-dip in overall consumer spending is drawing to a close." The BRC's Mr Robertston, took the opportunity yesterday to call on the Chancellor "to support households and businesses by holding back the costs he's responsible for".

He added: "He should scrap the increases in fuel duty planned for next year and reduce the threatened 5.6 per cent business rates rise. At a time when youth unemployment has passed the 1 million mark, promoting growth in a sector where under 25s make up a third of the workforce should be a priority for the Government."

More trouble in stores at high-street giants

Mothercare and French Connection appeared to throw down the gauntlet to the ONS yesterday, as they became the latest members of the high street to report extreme difficulties.

On the day that the ONS reported that Britain's high-street sales increased by 0.7 per last month, Mothercare and French Connection disappointed their investors so much that their shares dived by 18 per cent and 15.5 per cent, respectively.

For its part, Mothercare unveiled an £82m loss for the first half and slashed its dividend by more than two-thirds, as the retailer's performance in Britain dragged the wider group down.

Alan Parker, Mothercare's executive chairman, said: "The Mothercare group has had a difficult first half. Whilst the international business continues to perform strongly, our performance in the UK illustrates the extent of the challenges facing the business in a weak economic and consumer environment."

French Connection issued a profits warning, saying weak sales meant it was "unlikely" that full-year profits would meet its "original expectations". The group revealed revenues had fallen 10 per cent in the past three months on poor sales of its winter ranges.

A spokesman said: "The UK fashion shopper continues to act very cautiously and, in addition, the unseasonably warm weather has had a negative impact on sales of our winter ranges."

Shareholders were particularly disappointed by French Connection's announcement since it came just two months after Stephen Marks, the group's chairman, said the chain was "firmly back on a growth path", making it well placed to grow its business overseas.

French Connection said it was hopeful revenues in December and January would be better than a year ago, but admitted it was now too far behind to catch up for the year.

In a further sign of the difficulties on the high street, John Lewis's latest sales figures show revenues down by 0.8 per cent year on year in the first half of this trading week.

Tom Bawden

Start your day with The Independent, sign up for daily news emails
Sport
The Queen and the letter sent to Charlie
football
Arts and Entertainment
Eurovision Song Contest 2015
EurovisionGoogle marks the 2015 show
News
Two lesbians hold hands at a gay pride parade.
peopleIrish journalist shares moving story on day of referendum
Arts and Entertainment
<p>
<b>Kathryn Williams</b>
</p>
<p>
When I was supporting Ray La Montagne I was six months pregnant. He had been touring for a year and he was exhausted and full of the cold. I was feeling motherly, so I would leave presents for him and his band: Tunnock's Tea Cakes, cold remedies and proper tea. Ray seemed painfully shy. He hardly spoke, hardly looked at you in the face. I felt like a dick speaking to him, but said "hi" every day. </p>
<p>
He was being courted by the same record company who had signed me and subsequently let me go, and I wanted him to know that there were people around who didn't want anything from him. At the Shepherds Bush Empire in London, on the last night of the tour, Ray stopped in his set to thank me for doing the support. He said I was a really good songwriter and people should buy my stuff. I was taken aback and felt emotionally overwhelmed. Later that year, just before I had my boy Louis, I was l asleep in bed with Radio 4 on when Louis moved around in my belly and woke me up. Ray was doing a session on the World Service. </p>
<p>
I really believe that Louis recognised the music from the tour, and when I gave birth to him at home I played Ray's record as something that he would recognise to come into the world with. </p>
booksKathryn Williams explores the works and influences of Sylvia Plath
News
Liz Kendall played a key role in the introduction of the smoking ban
newsLiz Kendall: profile
Life and Style
techPatent specifies 'anthropomorphic device' to control media devices
Voices
The PM proposed 'commonsense restrictions' on migrant benefits
voicesAndrew Grice: Prime Minister can talk 'one nation Conservatism' but putting it into action will be tougher
News
ebookA unique anthology of reporting and analysis of a crucial period of history
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

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?