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UK retailers see sales slump despite huge discounts

Wide-scale discounts failed to prevent sales falling in November as today's official figures added to signs of a tough Christmas.

Sales volumes fell 0.4% from the previous month, according to the Office for National Statistics (ONS), with poor sales of computers, watches, jewellery and carpets.

The fall in sales, despite a large number of special offers from retailers desperate to drum up trade, was bigger than the City had expected and brought to an end two months of growth.

Non-food retailers battled against their biggest monthly fall in sales since February, while food stores saw their largest fall for half a year.

This was despite strong internet demand and a recovery in clothes sales, which had been hit in recent months as the mild autumn weather promoted shoppers to resist buying winter clothes.

However, there was some good news for cash-strapped households as the figures suggested that average prices declined 0.2% on the previous month.

The retail sector has fallen victim to a far-reaching consumer spending squeeze, driven by high inflation, muted wage growth and weak confidence.

Major players including Mothercare, HMV and Carpetright have all suffered, with only a small number, such as Sports Direct bucking the trend.

There are fears that big name retailers could go under after Christmas as consumers rein back spending amid fears of a recession.

Samuel Tombs, of Capital Economics, said: "Today's official figures confirm that November was a bad month for retailers and will raise concerns that spending will be soft over the crucial festive period.

"What's more, the drop in sales volumes may have been greater had retailers not resorted to another month of discounting."

While it was possible that shoppers were putting off buying gifts until the last minute, he added that "a splurge by consumers in the final weeks before Christmas will only mean that retail spending in early 2012 is even weaker than currently seems likely".

The worrying figures come after a Government-commissioned report by retail guru Mary Portas warned that the UK's high streets were under threat from online competition and described some town centres as "dead".

She said it was too late to save eve

Belfast Telegraph