Retail sales at their slowest for six years

Retail sales inched ahead between April and May by just 0.1 per cent to a level 1.3 per cent ahead of May last year, the lowest annual growth in any single month since January, 1999.

Over the three months from March to May year-on-year growth of 1.3 per cent was the weakest since March, 1999.

Yet despite the overall picture of a standstill contrasting sharply with the boom a year ago, details of the month's shopping reported by National statistics were not universally gloomy or as expected.

Sales of household goods, which have been wilting in the sluggish housing market, recovered quite strongly for a second month so that the latest three months are fractionally ahead on the year.

Against that, "non-store retailing", which includes Internet shopping which has been taking sales away from traditional stores, suffered a

0.7 per cent setback last month. But on a threemonthly basis, it is still 6.8 per cent up on the year.

Supermarkets and other food stores marginally extended a recovery they staged in April to emerge with

sales 1.8 per cent higher than in March/May, 2004.

The British Retail Consortium's director general Kevin Hawkins noted that the official numbers were almost completely in line with those released by the BRC earlier this month.

"The results confirm the adverse underlying trend in sales," he said. "Life on the high street is tough and consumer confidence is weak."

But Paul Clarke, national retail director at Barclays business banking, took a less extreme view.

"The boom in retail sales in the past few years was never sustainable in the long term, and it is unrealistic to compare present and future growth figures against this," he noted.

"After all, the long-term trend has been much nearer to recent growth levels.

He acknowledged that conditions are tough on the high street while retailers adapt to the new environment and falling prices and discounting squeeze their profits.

New floor space also makes like for like comparisons look worse.

Yet not every retailer is suffering, Mr Clarke added.

The Bank of England still believes spending may rebound in the coming months, though not back to deliver the annual growth of seven percent-plus seen a year ago.