Discounts fail to lift July sales

Shoppers are becoming increasingly price conscious

Price-conscious consumers continued to hold back on spending last month, the British Retail Consortium said, with "frivolous shopping off the agenda".

With consumer confidence at new lows, even heavy discounts had sometimes failed to lure people to open their wallets and purses, the BRC added.

Like-for-like retail sales fell 0.9% compared with July 2007. Total sales, which include new stores, rose 1.7%.

Sales of food and drink were up, but against weak sales a year earlier.

The results mean that there has been negative like-for-like sales growth for four of the past five months.

Between May and July, like-for-like sales were 0.3% lower than the same three-month period a year earlier.

Not over yet

According to the BRC, this slowdown looks set to continue.

"Frivolous shopping is off the agenda as most customers concentrate on value and durability and there are few signs the slowdown has yet bottomed out," said director general Stephen Robertson.

Declining consumer confidence and rising household bills have hit spending on furniture and other household items particularly hard, the BRC said.

Sales of furniture and flooring were down for the sixth consecutive month.

Where people did spend on items for the home, it was on basic lines or discounted products, rather than higher value, non-essential items.

Earlier this week, the employers organisation the CBI, said the UK economy was deteriorating faster than it had previously thought.

It has also revised down its forecast for economic growth in 2009 from 1% to 0.4%.