The struggle on the UK high street was underlined today as official figures revealed a greater than expected slowdown in retail sales.
Retail sales volumes increased month-on-month by 0.2% in July, compared to a revised 0.8% boost in June, the Office for National Statistics said. Economists had expected a 0.4% rise.
Household goods stores, clothing and footwear shops, and non-store retailing, which includes internet and mail order sales, all suffered as cash-strapped UK consumers reined in their spending.
The British retail sector has suffered at the hands of a squeeze on household budgets - driven by muted wage growth and high inflation, which was 4.4% in July, up from 4.2% the previous month.
UK retailers have had a torrid year with the likes of fashion chain Jane Norman, interior designer Habitat and wine merchant Oddbins falling into administration, while Mothercare, entertainment group HMV and chocolatier Thorntons have all announced store closures.
The ONS said there was evidence that retailers had brought in their summer sales earlier than usual, in May or June, to entice frugal shoppers. But there was not enough evidence to suggest chains had dragged the sales season on in July as volumes suffered, the ONS added.
Clothing and footwear stores posted a 0.3% drop in sales volumes between June and July, while household goods stores also saw a 0.3% decrease.
Household goods stores, such as Comet, have been among the worst-hit retailers during the spending squeeze as consumers forego purchases of big-ticket items such as fridges, TVs and cookers.
Non-store retailing, which includes internet, mail order and market stall sales, saw sales volumes drop 0.9% month on month. The sub-sector has seen strong growth over the year - with volumes up 16.9% compared to July 2010 - and the ONS put the drop-off in volumes down to a particularly strong performance in June.
Internet and mail order shopping is generally cheaper and consumers have more control over their total spend, as the temptation of impulse purchases is removed, the ONS added. Internet sales in July amounted to £523.4m sterling, compared to £395.8m the same month last year.
Food stores propped up overall sales volumes in the period, with growth of 0.7% as supermarkets slashed prices to boost trade. Elsewhere, sales volumes were flat compared to July last year, while sales values increase 0.8% month on month and 4.3% year on year.
