UK retail sales have shown weak growth ahead of the crucial Christmas period, according to the British Retail Consortium (BRC).
The group said that growth in sales was the slowest for six months, with food sales flat and non-food sales falling more than 2%.
Clothing and footwear sales continued to suffer from relatively mild weather, which delayed purchases of winter wear, while the economic uncertainty saw consumers hold back on buying bigger homeware and furniture items. Even growth in online, mail-order and phone shopping slowed.
Retailers had hoped that there would be some respite from what has proven to be a weak autumn for the sector as the Christmas shopping season approaches, and surprisingly strong figures from John Lewis, usually a bellwether for the sector, had raised expectations.
"There’s a worrying lack of cheer in these figures," BRC director general Stephen Robertson said. "The weakest increase in sales for six months suggests consumers are keeping a tight rein on their spending, despite Christmas being so near."
Stores are likely to try to boost sales with high levels of discounting during the Christmas period, Robertson said, adding that government measures to "inspire confidence in consumers and businesses is badly needed."
KPMG's head of retail Helen Dickinson said that the figures prove that the UK retail sector is flagging.
"Christmas is a crucial trading period for the UK retail sector but this year many retailers will be nervous and unsure as to how the season will pan out. Cash-strapped consumers continue to be reticent and last week’s gloomy economic forecast by the Chancellor won’t help to boost confidence levels," she said.
“Any sales are hard won, with high discount and promotion levels. Retailers’ performance is suffering because of weak top-line growth and declining margins, making the backdrop even more challenging. December will require some tough decisions for a number of retailers as they struggle to plot a path in such challenging conditions.”
Howard Archer, chief European and UK economist at IHS Global Insight, said that it was "hard to be optimistic" about prospects for consumer spending.
"Retailers certainly cannot rely on a late surge in consumer’s Christmas spending this given the squeeze on consumers’ finances and very low confidence, so there will be major pressure on many retailers to step up their discounting and promotions if their sales do not pick up appreciably very soon," Archer said. "And the BRC survey raises the question as to what extent cash-strapped and worried consumers are delaying their Christmas purchases in the belief/hope that struggling retailers will increasingly engage in discounting and promotions to generate sales?