UK retail suffered its biggest fall in sales figures since records began in 1996, according to information released by the British Retail Consortium (BRC).
The BRC said total sales in March were down 1.9% on the same time last year, footwear being the only growth sector as others, including electrical, food and drink, and clothing, declined.
A drop of 3.5% in like-for-like sales against a 4.4% increase last March was the worst showing in almost six years.
The news comes after a series of warnings from big names in commercial property, including Next, HMV and Currys that things were not looking too good.
The BRC expects the impending increases in National Insurance contributions to ‘compound’ existing economic pressures on the UK’s current ‘weak economy’.
Falling disposable incomes and rising utility bills, the increase in VAT and heightened job insecurity all mean there is a lack of a ‘feel-good factor’ for most commercial property owners on UK high streets.
Survey partner KPMG observed the emergence of a new, cautious spending pattern, evident since mid-January, which continues to have an effect on retail commercial property outlets.
The timing of Easter, falling later this year than last, has affected the figures to some extent and the BRC expects a boost this month, with the royal wedding and extended bank holidays predicted to draw out shoppers.
Separate figures released for the same period by research group Springboard show an increase in visitors to retail establishments, up 7.8% compared to February 2011. Springboard heralded this as a sign of increased consumer confidence, while acknowledging it is still ‘early days’ for the UK high street’s recovery.
Those with investments in commercial property will be looking at the Bank of England’s next move on interest rates, predicted to have a key impact on any projected recovery.
