DATA SNAP: UK BRC Mar Same-Store Retail Sales -1.2% On Yr
LONDON (Dow Jones)--U.K. retail sales fell again in March, despite recent signs of growing consumer confidence and housing market stabilization, indicating ahead of next week's budget that the government's value-added tax cut has failed to boost spending.
That spells bad news for Prime Minister Gordon Brown's government, which put a 2.5-percentage-point cut in VAT at the center of its GBP20 billion November stimulus plan.
Data Thursday from the British Retail Consortium showed March's same-store sales values fell 1.2% on the year, while total sales values - including those in new store space - were up 0.6%. In February, same-store sales fell 1.8% and total sales rose 0.1%.
While food and clothing sales values rose on the year, most sectors saw like-for-like sales down from a year earlier, the BRC said, cautioning that the timing of Easter made year-on-year comparisons difficult.
The March figures were slightly better than expected, as economists surveyed by Dow Jones Newswires last week had forecast total sales to decline 1.4% on the year.
"Customers are still worried about their jobs and their own finances - so they're keeping spending under tight control," said Stephen Robertson, director general of the BRC. "We've now seen negative sales in nine of the past 10 months."
The latest BRC report will intensify debate about the precise state of the U.K. consumer amid an increasingly severe recession.
A series of stronger-than-expected official retail sales reports raised questions about the resilience of the U.K. consumer. But the March BRC numbers chime better with the 0.7% decline in household expenditure in the fourth quarter, the biggest quarterly drop in consumer spending since 1991.
The U.K. economy is in recession, having contracted 0.7% in the third quarter and 1.6% in the fourth quarter, its weakest performance since 1980. In response, the Bank of England has cut its key interest rate from 5% in early October to 0.5%, the lowest level since the central bank was founded in 1694.
The BRC also reported that in the three months to March, like-for-like sales were down 0.7% from a year earlier. Total sales in the latest quarter from a year earlier were up 1.2%.
Helen Dickinson, head of retail at KPMG, said the survey highlighted the need to "remain cautious in drawing conclusions about the prospects for retail spending."
-By Joe Parkinson, Dow Jones Newswires; 44 20 7842 9291; joe.parkinson@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=ZoEQ9VJtYzxGsJmjLFOE1Q%3D%3D. You can use this link on the day this article is published and the following day.
That spells bad news for Prime Minister Gordon Brown's government, which put a 2.5-percentage-point cut in VAT at the center of its GBP20 billion November stimulus plan.
Data Thursday from the British Retail Consortium showed March's same-store sales values fell 1.2% on the year, while total sales values - including those in new store space - were up 0.6%. In February, same-store sales fell 1.8% and total sales rose 0.1%.
While food and clothing sales values rose on the year, most sectors saw like-for-like sales down from a year earlier, the BRC said, cautioning that the timing of Easter made year-on-year comparisons difficult.
The March figures were slightly better than expected, as economists surveyed by Dow Jones Newswires last week had forecast total sales to decline 1.4% on the year.
"Customers are still worried about their jobs and their own finances - so they're keeping spending under tight control," said Stephen Robertson, director general of the BRC. "We've now seen negative sales in nine of the past 10 months."
The latest BRC report will intensify debate about the precise state of the U.K. consumer amid an increasingly severe recession.
A series of stronger-than-expected official retail sales reports raised questions about the resilience of the U.K. consumer. But the March BRC numbers chime better with the 0.7% decline in household expenditure in the fourth quarter, the biggest quarterly drop in consumer spending since 1991.
The U.K. economy is in recession, having contracted 0.7% in the third quarter and 1.6% in the fourth quarter, its weakest performance since 1980. In response, the Bank of England has cut its key interest rate from 5% in early October to 0.5%, the lowest level since the central bank was founded in 1694.
The BRC also reported that in the three months to March, like-for-like sales were down 0.7% from a year earlier. Total sales in the latest quarter from a year earlier were up 1.2%.
Helen Dickinson, head of retail at KPMG, said the survey highlighted the need to "remain cautious in drawing conclusions about the prospects for retail spending."
The BRC survey covered the four weeks from March 1 to April 4. BRC Web site: http://www.brc.org.uk -By Joe Parkinson, Dow Jones Newswires; 44 20 7842 9291; joe.parkinson@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=ZoEQ9VJtYzxGsJmjLFOE1Q%3D%3D. You can use this link on the day this article is published and the following day.
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