Retailers in the UK are being forced to cut their profit margins to the bone, according to Tuesday’s report from the British Retail Consortium. Sales of big-ticket items are particularly affected as consumers pinch their pence and wait for discount sales before purchasing non-essentials such as the newest electronics, home furnishings and designer clothing, amongst many others.
BRC says that retail sales for August were down by 0.6% from last year, though the same like-for-like sales showed a rise of 0.6% in July, amounting to a flat line for current sales. Those figures exclude stores that opened or closed during the year; overall, with new stores included, sales rose by 2.5% on the year in July and only 1.5% in August.
Analysts believe that the slump is due to a combination of factors, with lack of confidence being the most crucial. According to a poll from research firm GfK NOP, consumer confidence fell to a four-month low in August, indicating fears of another recession. General factors include global financial worries, a high inflation rate, stagnant wages and fiscal belt-tightening, all of which lead to curtailed spending.
The only retail sector that didn’t show a decrease last month was the food industry, i.e. supermarkets and convenience stores etc. That may simply indicate that most of people’s available cash is going towards the essential and relatively cheaper products on the market, like food.