Slump in sales rocks the high street

Figures from the British Retail Consortium (BRC) show retail sales were 2.1 per cent lower on a like-for-like basis in May, compared with a year ago.

The BRC said the numbers, which also show a 0.3 per cent drop in total sales, are a more realistic reflection of conditions on the high street after two previous months distorted by the later Easter and extra bank holiday.

The sales slump is likely to pile pressure on the Bank of England to keep interest rates at their current record low, as rising inflation, low wage growth and fears over public sector spending cuts hit confidence.

Stephen Robertson, BRC director general, said: “The first half of May was better than the second, when the weather turned unseasonably wet and cold in many parts of the country, but customers’ fundamental reluctance to spend is now clear to see.”

Howard Archer, chief UK and European economist at IHS Global Insight, said: “Pressurised consumers have quickly put their hands back in their pockets after being encouraged to temporarily loosen purse strings in April.”

Baby-and-child retailer Mothercare, entertainment group HMV, sportswear firm JJB and electrical retailers Comet and Dixons have all announced store closures in recent weeks.