Budget 2012 - Changes may not do enough for retail
Thursday 22nd March 2012
Official retail figures reported today by the Office for National Statistics confirm spending is growing more slowly than inflation, meaning people are cutting back on purchases.
They show a year-on-year growth in retail sales values for February of 2.6% compared with a 2.3% increase reported by the British Retail Consortium's own figures earlier this month. The official figures mirror the trends highlighted by the BRC, showing the food sector experienced some better growth but clothing and footwear worsened. Household goods had a particularly weak month.
The ONS also revised its January estimate to bring it more in-line with the BRC's findings.
The day after the Budget, the BRC said these results showed more should have been done to support the retail sector, particularly by tackling the eye-watering 5.6% increase in business rates coming into effect in April which will make success on the high street even harder to achieve.
BRC Director General, Stephen Robertson, said: "The headlines from yesterday's Budget do nothing immediate to change the tough reality millions of families are dealing with. It's good the Chancellor's done something to help households' abilities to spend by raising personal tax allowances but disappointing it won't take effect for another 12 months. Meanwhile the continuing rise in fuel prices keeps eating into families' budgets and hitting their ability to spend.
"Total sales growth is still below inflation, so overall customers are cutting back on purchases. Food picked up but non-food sales deteriorated with goods affected by the slow housing market among those particularly struggling.
"The Chancellor's move on Corporation Tax was very welcome but it's important to remember the burden of other taxes needs to be addressed if they are not to act as a drag on growth. It's deeply disappointing there was nothing done to bring the imminent 5.6% increase in business rates more in-line with reality. Inflation is already much lower than this and due to fall further. Action on business rates is needed to show the Government is serious about wanting to revitalise our high streets."
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