Retailers hit by slower spending

The BRC said sales were helped by an early Mothering Sunday

UK retailers saw consumers cut their spending "in earnest" in February, the British Retail Consortium has said.

Like-for-like sales - which exclude new store openings - rose 1.5% last month, down from January's 2.6% rise, as New Year and Christmas bills kicked in.

However, on a three-month basis, sales edged up 1.6% from 1.5%, with food showing strong gains.

But the BRC said it was cautious looking ahead and the timing of Mothering Sunday "flattered" the data.

Spending in the lead up to Mothering Sunday was included in the latest figures, whereas in 2007 it fell in March, said the BRC.

'Contest every inch'

"However, the UK food and grocery sector appears more competitive than ever as retailers contest every inch of ground," said Joanne Denney-Finch, chief executive of IGD, a food industry research group.

The chancellor's theme should be a Budget to revive the economy, rather than one piling on new taxes and regulations Stephen Robertson, BRC

But she added that retailers would have to work "extremely hard to entice incremental spend through the vital Easter season".

But, while the food sector did well, furniture sales dropped sharply - seeing the largest drop since July 2005.

And clothes sales were lower than a year earlier for the fifth month in a row, "despite continued discounting and promotions".

Stephen Robertson, director general of the BRC, said the figures illustrated that both retailers and consumers were being squeezed by sharp rises in utility bills and fuel costs.

In view of the latest figures and ahead of the Budget due on Wednesday, he said: "The chancellor's theme should be a Budget to revive the economy, rather than one piling on new taxes and regulations."