Things are not looking so good for UK retail stores. In fact, reports now show that sales over the summer grew by the slowest amount since back in July of 2009, when the UK was going through its recession. To make matters even worse, most experts assume that most stores are not going to see any kind of growth in sales until 2013 at the earliest. This means 2012 could prove to be a very long and difficult year.
This news could not have come at a worse time. In fact, it comes just days after the Office of National Statistics released figures showing that both inflation and unemployment are at higher levels than expected. All of this and more is just further evidence that the UK's economic recovery is reaching a standstill.
The Office of National Statistics went on to say that the volume of goods sold in shops, apart from supermarkets, has gone flat over the last three months when compared to last year. This means that the sales of electrical goods, clothing, furniture, and other items are at their lowest levels in two years. In fact, retail sales grew by only 0.2 percent in July when compared to the month before. This is lower than the 0.3 percent that economists had expected.
There are a number of things that could be causing Brits to cut back on their spending. However, experts think that spending has been decreased due to increases in energy and petrol bills. These are things that Brits need, and thus they have to make cutbacks elsewhere.
Brits also seem to be cutting back on the amount of food they buy each week. Food sale volumes dropped by 1.6 percent in July. This is an improvement month over month, but it is not as high as what experts had expected. With people buying less food, the Office of National Statistics said that medium-term supermarket sales are at their lowest level on record.
The strategic retail adviser to Deloitte, Richard Hyman, said that retailers are unlikely to see any kind of growth until the end of next year. He then pointed out that 'no growth' is about as good as it is going to get in the UK during these hard times. Right now, retailers need to be hoping that sales do not drop any lower than what they are at. Looking forward, things will improve, but it is going to take some time to get there.
The director-general of the British Retail Consortium, Stephen Robertson, said that it is all pretty simple. Consumers' ability to spend is being squeezed by rising costs and low wage rises. People have to make a cutback somewhere, and stores are suffering because of it. In fact, some stores may be forced to close down before things get any better.