Belfast Telegraph

Tuesday 16 September 2014

Retailers edge ahead despite rain

A sales boost for clothing stores was partly offset by wet weather hitting food outlets

Retailers scraped growth last month as a promotion-led boost for clothing stores was overshadowed by a weather-hit performance from food outlets.

Retail sales volumes edged 0.1% higher between May and June, the Office for National Statistics (ONS) said, which fell far short of City expectations of 0.6% growth.

The figures came as a number of retailers revealed a difficult summer, with Mothercare, JJB Sports and Halfords all revealing dismal results.

The wettest June on record since 1910 was behind a 0.7% drop in food sales last month, the ONS said, while clothing retailers saw sales jump 2.5% as they brought forward their summer sales. The impact of discounting and slowing inflation was seen in the 0.5% drop in retail sales values between May and June.

Against expectations, the Queen's Diamond Jubilee celebrations proved to be a damp squib for retailers as the ONS said it did not have a "significant impact" on sales.

The weak performance in retail will dash any hopes that the economy might have emerged from its double-dip recession in the second quarter, ahead of official growth figures next week.

The economy entered a technical recession in the first quarter of the year, with gross domestic product declining 0.2%, following a 0.3% drop in the final quarter of last year.

The retail sector forms part of the powerhouse services industry, which accounts for 75% of the total economy in the UK. The impact of the weather on food sales was reflected in inflation figures earlier this week, which showed the torrential rainfall had weighed on food retailers pricing power.

Elsewhere, department stores saw 0.2% growth in the period, while household goods stores grew by 0.3%. The ONS reported 1.4% growth in so-called other stores, which covers a broad range of retailers, but was driven by sales in sporting goods and toys.

The total spent in the five-week period to June 30 was £32.7 million, which compares to £26.4 billion in the four weeks to May 26. Internet sales continued to grow, rising 14.3% to £493.3 million, and accounted for 8.5% of all retail sales values.

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