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Last Updated: Tuesday, 8 November 2005, 07:51 GMT
Warm weather hurts retail sales
Shoppers in Oxford Street, London
Shoppers are still reluctant to spend
Sales on the High Street have declined for the seventh consecutive month as warm weather hit clothing purchases.

Like-for-like sales were down 0.2% in October, according to figures from the British Retail Consortium (BRC).

Over the last three months, sales have fallen by 0.7% compared to the same period last year.

However, the decline in sales was less severe than in the 0.8% in September, suggesting that the worst might be over for Britain's struggling retail sector.

The BRC said it was pleased by the slowdown in declining sales.

"Another slight improvement in like-for like sales is very welcome, especially considering the downward trend in the first half of this year," said Kevin Hawkins, BRC director-general.

Clothing and furniture

Sales of clothing and footwear slowed further as warm weather hit sales of winter items.

However, food and drink sales rose and Halloween sales were strong.

But sales of big-ticket items like televisions were weak, with consumers opting for small items and essentials.

And the decline in the housing market hurt furniture and carpet sales.

Consumers appeared to be "cautious," the BRC said, and were "increasingly prepared to wait for bargains" with so many promotions and discounts available on the High Street.

Mixed picture

Retailers are hoping that sales will pick up in the crucial period running up to Christmas, but there are concerns that they will be forced to begin sales early.

"As the Christmas peak gets later each year, the big questions out there are how much extra promotional activity will be required to drive the Christmas numbers, and who will lose their nerve and bring their sale forward," said Amanda Aldridge, of consultants KPMG.

So far retailers have reported mixed results, with a tough year for Argos and Homebase but better profits for Marks and Spencer.

Other figures also suggest some improvement in the retail climate.

Official retail figures showed an increase of 0.7% in September, while the CBI reported last week that retail sales volumes had fallen less than forecast.

The mixed picture is likely to contribute to the Bank of England keeping interest rates on hold when it announces its latest decision later this week.

Retailers are still hoping that a rate cut in the New Year, however, could help boost sales.




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