Retail will have two more years in the doldrums

Experts have predicted that the big retail chains will see no real growth in sales until at least 2013, and warns that the economy is still very worrying and fraught with difficulties. The current gloomy high street performance is more bad news for the government, as the official retail figures released by the ONS, Office of National Statistics, comes only days after official data showed that both unemployment and inflation was higher than expected.

This indicates that the economic recovery in the UK has stalled.  The ONS has said that the volume of goods that have sold in all stores bar supermarkets had been very flat over the three months ending in July compared to the same period last year. This effectively meant that sales of clothes, electrical goods and furniture on the high streets of the UK were at their lowest levels since 2009.

Retail sales grew overall in July by 0.2% compared to June, but this fell short of the 0.3% growth that the economists had predicted. The simple fact is that consumers have less money to shop with thanks to the rise in petrol and energy bills, the increase of VAT to 20%, a soaring inflation of 4.4% and the ever present worry over job security.

Figures also showed that the volume of food sales, which is the amount of food that people buy in their weekly shop, fell by 1.6% during July. While this is an improvement on June’s performance, the ONS said that the mid-term sales for supermarkets are the lowest on record. The strategic retail advisor for Deloitte, Richard Hyman, said that retailers needed to prepare themselves for the fact that they were looking at the end of next year at least until they saw any worthwhile growth in sales.