The Office for National Statistics reports that during February, the annual growth of retails sales has reduced to 0.4 percent. This is the slowest growth since the 0.2 percent in September 1995. With a drop in sales volume of 1.9 percent from January to February, these are difficult times for most retailers.
The Retail Sales Index (RSI), is created by the Office for National Statistics from a survey of 5,000 businesses throughout the UK. It is based on the total retail sales for each business and is used to asses how well the economy is progressing. The RSI for February, shows that all retail sectors experienced a reduction in sales volume from January to February. During February, the total average weekly value of retail sales was an estimated £4.8 billion, with internet retail sales accounting for approximately £167 million of this figure.
The High Street retailer Next, has reported a 1.7percent drop in revenue to £3,272 million and expects that trading in the coming year will continue to be tough. Kingfisher PLC, owner of the B&Q DIY chain, has also reported that their UK retail sales have receded. Kingfisher has seen UK retail sales drop by 2.6 percent to £4.3 billion in the 12 months to January 31st, making a retail profit of £129 million.
The RSI shows that between January and February, the total sales volume of textiles, clothing and footwear fell by 3.7 percent. The retailer JJB Sports, which publishes its annual report in April, is trying to improve its financial situation by selling 53 of it 55 fitness clubs to JJB founder David Whelan. The deal, worth $83.4 million, is just one of the measures aimed at saving the company. JJB Sports has seen the closure of 140 of its stores, but has 250 stores still trading.
Its not all doom and gloom on the retail front, with supermarkets doing especially well. Sainsbury’s has reported that it has experienced its best sales growth for five years, with total sales over the final quarter of the year up by 3.4 percent ( 6.8 percent excluding fuel ). Their credit crunch friendly basics value range, showed a 60 percent increase in sales over the past year. Sainsbury’s is expanding its store base and has recently acquired 24 stores from the Co-operative Group. Morrisons has also reported an increase in like for like sales, seeing an increase of 7.9 percent (excluding fuel).
The RSI first release can be viewed here: