Articles | High street feels the pinch

High street feels the pinch

Published: Thursday, 24 April 2008, 6:22PM

Retailers are being forced to slash prices after the toughest month in more than a year on the high street.

New figures from the Office for National Statistics show a fall in sales of 0.4 per cent in March, following a 2 per cent rise in the first three months of 2008.

The total value of sales in March was 4.4 per cent higher than last year but the volume of goods sold was 5.6 per cent ahead of March 2007 - indicating retailers are having to lower their prices.

Department stores bore the brunt of the sales misery with a 2.5 per cent fall in March, followed by a 1.7 per cent fall for clothing and footwear retailers.

Food stores also saw sales volumes slip 0.1 per cent compared to February.

The British Retail Consortium said a survey it carried out last week recorded a much gloomier 1.6 per cent fall in total high street sales last month.

Director general Stephen Robertson said: "These figures paint an overly rosy picture. Sales growth is far from robust.

"The three-month average disguises a fall last month and hides the fact that sales are being driven by deep and widespread discounting."

Retailers are calling for more interest rate cuts from the Bank of England to help shoppers who are feeling the squeeze from more expensive mortgages as well as soaring food and petrol costs.

Earlier this month the Bank of England cut interest rates to 5 per cent amid concerns over "worsening credit conditions" for households, while a host of major retailers such as Tesco and Debenhams have warned of challenging conditions this year.