Steve Hawkes and Gráinne Gilmore
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The extent of the consumer downturn was thrown into question yesterday by official figures that claimed that clothes stores and shoe shops had led a mini-revival on the high street last month.
The Office for National Statistics (ONS) said that retail sales volumes last month were 1.2 per cent higher than in July and up 3.3 per cent on a year ago. The figures follow a series of warnings from retailers that the trading climate is one of the worst they have seen for two decades.
Economists and retail executives alike said that the brighter picture painted by the ONS raised fresh questions about the accuracy of the figures.
Sir Philip Green, the Topshop-to-Bhs billionaire, said the only reason that sales appeared stronger than a year ago was the fact that retailers were battling with floods last summer. “We were stuck in canoes and wellington boots,” he said.
Jonathan Loynes of Capital Economics added that the ONS figures appeared “puzzingly strong” compared with the gloomier message from the British Retail Consortium. He added: “As such, we suspect that the Monetary Policy Committee will treat them with a pinch of salt.”
The ONS conceded that the retail sales figures were subject to volatility. It pointed out that sales volumes over the three months to August fell by 0.8 per cent. The figures claimed that sales volumes at clothing and footwear stores in August were 8.8 per cent higher than a year ago.
They also indicated that food price inflation has been a significant boost for supermarkets. While sales volumes at food stores in the three months to August were 0.6 per cent higher, sales values rose by 5.5 per cent.
The ONS said that shoppers spent £5.1 billion a week last month, up 3.9 per cent on a year ago.
Howard Archer, of Global Insight, said that the outlook for sales was bleak, despite August's sturdy figures. “Consumers are being hit left, right and centre by rising unemployment and muted disposable income growth - a serious squeeze on purchasing power,” he said.
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