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Business News

Stuttering high street sales fuel fears of double dip

A poor performance by footwear and homewares retailers led to lacklustre sales on the high street last month, reinforcing warnings of a spluttering recovery in consumer spending.

Homewares shops suffered their biggest decline since spring last year, as nervous consumers shied away from big-ticket purchases. The annual rate of underlying retail sales rose by just 0.5 per cent in July, compared with a rate of 1.2 per cent in June, according a survey by British Retail Consortium and accountant KPMG. The overall figure was lifted by a resilient performance from food retailers. Total retail sales rose by 2.6 per cent in July.

Stephen Robertson, the director general of the BRC, warned that one-off boosts to retailers appeared to have gone. "These are poor results for non-food retailing, with some sectors actually seeing sales falls," he said. "The benefit from sunny weather receded as it turned cooler and wetter in parts of the country, while the World Cup boost ended."

Footwear sales slowed again in July, the BRC-KPMG poll found, recording their weakest performance since August 2009. Sales of men's and children's shoes were actually lower than they were last August.

Helen Dickinson, the head of retail at KPMG, said a "jittery housing market" had contributed to a poor month for home-related sectors.

While sales of non-store general merchandise sales, largely online, rose by 11.3 per cent in July, Mr Robertson said this was "disappointing" compared to annualised growth of 20 per cent in May and June. He also warned of faltering consumer confidence caused by uncertainty about the depth of the coalition's austerity measures.

"The overriding factor is consumer confidence, which has fallen recently, though people are still more confident than [they were] this time last year," Mr Robertson added. "Talk of spending cuts is unsettling customers and they are concentrating on essentials."