UK Sees Largest Retail Slump In 25 Years

SHUTTERSTOCK

The retail industry in the U.K. is experiencing quite a notable slump, the likes of which haven’t been seen in a quarter century.

The Guardian shares that the 3.4 percent decline in clothing and shoe retail sales — which contributed to a 0.4 percent drop in overall sales — that befell Britain in February marked the sixth consecutive month of a downward trajectory in that regard, making it the longest such streak in the country since Oct. 1991.

Among analysts looking for explanations to this negative trend, the U.K.’s Office for National Statistics (ONS), for one, notes that the recent unseasonably warm weather did not help the sales of winter jackets in the country. That, nonetheless, does not provide an answer, notes The Guardian, for the fact that the industry’s troubles go back to last summer.

While there had been hopes that the 2.3 percent increase in sales that U.K.’s retail industry experienced in January would turn things around, that turned out not to be the case.

“Taken together, the first two months of the year suggest that sales are running 1.6 percent higher than in the fourth quarter. However, all is not quite as rosy as the headline numbers suggest,” Chris Williamson, chief economist at the financial data provider Markit, told The Guardian. “The three-month trend is the weakest since last August, the rate of increase dropping from 1.6 percent in January to just 0.8 percent when sales volumes in the latest three months are compared against the prior three-month period.”

“Spending is also being driven by low prices,” continued Williamson, “as indicated by the value of sales rising just 1.4 percent on a year ago in February compared to the 3.8 percent rise in volumes. A healthier picture, and one that the Bank of England would clearly like to see, would be one where rising demand is allowing retailers to push up prices to a greater extent.”