According to the British Retail Consortium (BRC), retail sales in the UK are the worst since summer 2005 as retail sales fell -0.9% when compared to 12 months ago when sales had only risen by +1.2%.

This is blamed on changeable weather although extended clearance events helped some but underlying trading remained tough. Food and drink was the only sector to show significant growth but that was against a weak July 2007. Clothing and footwear fell further and furniture and homewares remained well down on a year ago, despite continued discounts and promotions.

Consumer confidence has weakened still further to new record lows. With increasing demands on household budgets, shoppers are very price-conscious and reluctant to spend on big-ticket items.

Joanne Denney-Finch, Chief Executive, IGD, said: “Food and grocery, while not immune to a downturn, often proves to be more resistant and grocery sales in July remained strong, although this is substantially affected by inflation.

“Economic conditions are starting to affect shopper behaviour in different ways. Some are shopping more locally, for example, or buying in season. Some are returning to frozen foods. Others are changing their usual brand or outlet. We are seeing premium brands strengthen as well as the value end of the market as people sharpen their shopping skills, seeking out the best prices and promotions available to suit their individual needs.”