Retailers’ group warns over low sales growth

The industry lobby group said four years after the bank’s failure, Government must attempt to stimulate shopper confidence by keeping a lid on costs for consumers.

Year-on-year growth in total retail sales has averaged just 2.1 per cent over the past two years, lower than inflation, suggesting stagnant sales volumes.

That compares with growth of around 4.5 per cent before the credit crunch.

BRC director general Stephen Robertson said: “Four years on from this key event in the banking crisis, which sent retail sales plummeting, sales growth is still less than half what it was before. Sales volumes are now going backwards.

“Representing over five per cent of GDP and more than 10 per cent of jobs, retail is a vital part of the UK economy and a key indicator of its health. Retail is fundamentally resilient.

“It’s still the biggest private sector employer in the country but this analysis vividly demonstrates the lasting blow dealt to households and to retail sales by the crisis of 2008.”

The BRC said with consumer spending falling for three quarters in a row, the sector has led the economy into its double-dip recession.

Like-for-like sales value growth has hovered around zero for the past two years, it added, as consumers are squeezed by economic uncertainty, unemployment and higher bills.

Mr Robertson said: “Any successful economic fight back needs a return to strength for the retail sector.

“It’s not enough just to talk about growth. We need the Government to rebuild confidence, support customers and retailers and get spending going again by holding back the costs it is responsible for.

“Scrapping the postponed fuel duty rise, now due in January, and freezing business rates next year are top of my list.”

Figures this week are expected to upwardly revise the GDP slump in the second quarter, from a 0.5 per cent to a 0.4 per cent contraction.

However, IHS Global Insight analyst Howard Archer said: “The UK still has a tough job in developing significant sustainable growth given tighter fiscal policy, still significant pressures on consumers and soft global growth.”