Retail sales weakest since May

Retail sales grew by just 0.7% last month, the weakest growth since May, as shoppers turned their back on pre-Christmas discounting.

A study by the British Retail Consortium (BRC) said that on a like-for-like basis, which only includes stores that have been open for at least a year, sales fell by 1.6%

The BRC blamed mild weather for falling sales of winter clothing and footwear, however food sales were improving slightly, up 1.5% on a like-for-like basis between September and November.

Stephen Robertson, director general of the BRC, said: “Consumers are not quite in the Christmas mindset yet, although stores are working to generate much-needed sales with high levels of festive discounting. This November’s mild weather contrasted with much lower temperatures last year, hitting sales of winter clothing and footwear particularly hard.”

“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,” added Helen Dickinson, head of retail at accountants KPMG which co-authored the survey.

• Elsewhere, the latest grocery share figures from Kantar Worldpanel, published today for the 12 weeks ending 27 November  2011, show the grocery market growing at 4.2% per year.  This remains below the 6.2% inflation rate as shoppers continue to feel the pressure on their purse strings.

Tesco is the only retailer among the big four to see its share slip - from 30.7% a year ago to 30.5% - and its growth rate of 3.8% has also fallen behind that of the market.

Morrisons continues its positive run, seeing year-on-year share uplift from 12.0% to 12.1%. Asda has also posted its strongest growth since December 2009 as the integration of the UK Netto stores is completed.

Edward Garner, Director at Kantar Worldpanel said: “This may at first seem disappointing for Tesco given the ‘Big Price Drop’ initiative; however, it is not wholly unexpected.  With more products available for less, the amount of cash taken at the tills has understandably dropped.  Despite this, Tesco has successfully attracted more shoppers to its stores through the promotion. This strategy, coined ‘self imposed deflation’ by Tesco, is something we have seen in the past and it’s clear that Tesco is using this method again to help shoppers save their pennies.”