September 6, 2010 / 11:04 PM / 9 years ago

Retail sales growth picks up in August

LONDON (Reuters) - Retail sales growth accelerated last month, helped by clothes sales, a survey showed on Tuesday, but discounting played a part in the improvement and consumers remain reluctant to splash out on expensive items.

The British Retail Consortium said retail sales values were 1.0 percent higher than a year ago in August on a like-for-like basis. Total sales, which include new floorspace, were 2.8 percent higher.

Both measures were an improvement on July but the BRC said a very poor August in 2009 had flattered the figures.

“The good news is sales are still growing but anxiety about job cuts and tax rises is putting people off making major spending commitments,” said Stephen Robertson, BRC director general.

Britain’s coalition government has outlined a fierce austerity drive over the next five years to cut a record budget deficit, raising concerns that the economic recovery could struggle to gain momentum.

New autumn and winter clothing ranges and the traditional boost from back-to-school clothes helped drive sales higher but food sales growth slowed slightly.

Homeware sales also improved but were often “deal-driven”, the BRC said.

“August 2009 was the worst month of the second half of last year so this year’s results are nothing to write home about,” said Helen Dickinson, head of retail at KPMG.

“Despite the recent improvement in consumer confidence, my view is that people remain worried about how they will personally be affected by the fiscal tightening measures. The impact on spending will become more apparent as we move into the higher volume autumn months.”

Reporting by Matt Falloon; editing by Patrick Graham

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