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Consumer recovery underway as total sales values up again

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Like-for-like sales values rose by 1.4 per cent in the year to June, with total sales values up by 2.9 per cent over the same period, according to the British Retail Consortium.

Retail sales has now been positive in five of the first six months of 2013, pointing towards a consumer recovery which seems to be gaining an ever-firmer footing.

Eric Abensur, CEO, Venda said that the news was an encouraging sign for retailers but work “still needed to be done.” He said: “Consumers naturally search for bargains when shopping, but retailers must avoid competing solely on price at the expense of other critical factors. Considering ethics and providing customers with an engaging and personalised experience is essential.”

Last June saw sales benefit from the Jubilee bank holiday celebrations and this year has food sales 0.7 per cent down over the three months to June, while non-food sales were up 1.4 per cent. Aggressive discounting by retailers during the traditional summer sales period may have paid off in terms of boosting volumes – although perhaps at some cost to margins.

Clothing was the best performing sector in June and appears to have gained particularly from heavy discounting from retailers, as unsold items were sold at low prices due to the poor spring weather. DIY and gardening products also recorded a good month.

Vicky Redwood, Chief UK Economist at Capital Economics said: “Today’s figures show there is some sort of recovery but I think it would still be difficult to maintain that momentum. For the next three or four years the UK could see a modest increase in spending.”

With the first quarter of 2013 seeing the largest fall in real household incomes since 1987, continued growth in spending has relied on a sharp fall in the household saving ratio. As a result, the longer-term sustainability of this recovery still remains in doubt.

Published on Tuesday 09 July by Editorial Assistant

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