British retail sales in March were
the worst in 16 years according to a survey published Tuesday. Meanwhile a
report on the housing market shows that activity is in the doldrums in almost
The British Retail Consortium
reports that UK retail sales values were down 1.9% on a total basis from March
2010, when sales had risen 6.6%, boosted by Good Friday and Easter Saturday
falling in the March trading period. On a like-for-like basis, sales were 3.5%
lower, against a 4.4% increase in March 2010.
Like-for-like food sales fell well below their year-earlier level and non-food
sales showed an even larger decline. Consumers' underlying uncertainty about
jobs and incomes, as well as the later Easter, hit both. Big-ticket home and
furniture purchases suffered most and were often promotion-led.
Non-food non-store (internet, mail-order and phone) sales growth fell further in
March. Sales were 7.5% higher than a year ago, the smallest increase since the
series began in October 2008 and much weaker than the 10.4% in February.
Stephen Robertson, director
general, British Retail Consortium, said: "This is the
worst drop in total sales since we first collected these figures in 1995.
Non-food retailers were particularly hard-hit. This is strong evidence of the
pressure customers and traders are under. This year's later Easter is a factor
but this fall goes way beyond anything that can be explained by that alone."
Helen Dickinson, head of
retail, KPMG, said: "The food sector suffered in the
month due to Easter purchasing falling into March last year, thus impacting the
overall results. However, beyond this the trend continues in a marked downward
direction: non-food continues to struggle, with big-ticket and home-related
sectors again being the hardest hit.
We have seen an emergence of new,
lower spending patterns since the middle of January, which are currently
continuing to trend downwards. Many retailers will not be able to sustain this
ongoing weakness in demand beyond the short term and are hoping for some good
news around the extended bank holiday period and a feel-good factor driven by
the royal wedding. However, as disposable income continues to fall, without
reducing saving or increasing borrowing – which would oppose current trends –
this will not be possible."
The Royal Institution of Chartered
Surveyors (RICS) in its monthly survey of surveyors, says London is the only
region where house prices are rising while areas in the North of England,
Northern Ireland and Wales report sharp falls.
"The rather negative
outlook for property prices across the UK seems to better reflect the general
economy than the micro climate of London," said RICS
housing spokesperson, Ian Perry.
"The low level of buyer interest in many parts of the UK continues to impact
on the market, resulting in some downward pressure on prices.
"With the prospect of forthcoming interest rate rises and continued shortage of
mortgage funding, it seems that overall recovery for the national housing market
is still some way off," he added.
The survey was based on responses
from 259 surveyors who work as estate agents and found that nearly 60% of
surveyors reported no change in the prices of the properties they had sold.
"Within England and Wales, a clear North South divide is emerging, with
London being the only region recording rising prices, demonstrating that the
capital is still operating under different market conditions to the rest of the
country," RICS said.
Some 23% more surveyors reported a fall rather than a rise in property prices
last month, which compares to 26% in February, though most recorded falls of
between 0% and 2%, with prices in London continuing to rise.
Nevertheless, 24% more surveyors expect prices to fall in the next three months,
which marks the 10th consecutive month that the reading has been negative.
Completed sales per surveyor fell to their lowest level for 21 months, at just
14.4 sales in the past three months.