Sales on the high street over February were the weakest for almost two years, showing just how hard the consumer economy has been hit by rising household bills and declining confidence.
Over the month, like-for-like sales - which strip out the effect of new space - fell by 0.4pc, while total sales rose by just 1.1pc. Excluding the date-related impact of Easter last year, this was the poorest monthly performance since May 2009.
Only footwear and food and drink retailers saw positive sales over the month, meaning that clothing, furniture and electrical retailers saw "sharply" negative sales, according to the BRC-KPMG Retail Sales Monitor.
Sales of large items of furniture were particularly badly hit due to January's VAT increase.
Stephen Robertson, director general of the British Retail Consortium (BRC), said:
"Apart from a bit of help from half-term for some retailers, February's sales were weak. Other than the negative figures last April (caused by the year-to-year movement of Easter), this February's 1.1pc total sales growth is the poorest since May 2009 – even poorer when the impact of the VAT rise on inflation is taken into account.
"Food sales held up. Sales of non-food goods, particularly more expensive items such as furniture and electricals, suffered.
Retailers are suffering because the rising cost of fuel, food and utility bills are squeezing disposable incomes. Asda, the supermarket, estimates that households are £9 a week poorer then they were a year ago.
Helen Dickinson, head of retail at KPMG, said: "February was a continuation of the trend seen in the latter part of January, with struggling non-food sales highlighting consumers' caution over the outlook. There is inflation in these numbers, so volumes are lower and with people making less shopping trips, fewer retailers are benefiting from the limited spending capacity available," she said.
Mr Dickinson said that price and value have become "higher decision-making criteria" when people go shopping.
"Consumers are re-adjusting their spending habits to reflect the reduced disposable income in their pockets and the key question for retailers is whether they have finished yet," she said.
The BRC's Mr Robertson said that retailers have warned the Coalition Government that action is needed to reduce red tape and help them to create jobs to aid the economic recovery. The group has called for urgent action in this month's Budget.
"Against this background of deteriorating sales, the BRC has written to the Chancellor urging him to use his Budget to support retail's essential contribution to jobs and growth by avoiding new burdens and removing existing ones," said Mr Robertson. The proportion of UK homes bought without a mortgage has risen to the highest level for at least a decade, according to new research.
In the final three months of 2010, 40pc of UK housing transactions were by cash buyers, according to Savills, the highest level since the property agent began collating data in 2002.
Meanwhile, the Royal Institution of Chartered Surveyors says 26pc more property agents saw UK house prices fall rather than rise in February
Retailers are suffering because the rising cost of fuel, food and utility bills are squeezing disposable incomes. Asda, the supermarket, estimates that households are £9 a week poorer then they were a year ago.
Helen Dickinson, head of retail at KPMG, said: "February was a continuation of the trend seen in the latter part of January, with struggling non-food sales highlighting consumers' caution over the outlook. There is inflation in these numbers, so volumes are lower and with people making less shopping trips, fewer retailers are benefiting from the limited spending capacity available," she said.
Mr Dickinson said that price and value have become "higher decision-making criteria" when people go shopping.
"Consumers are re-adjusting their spending habits to reflect the reduced disposable income in their pockets and the key question for retailers is whether they have finished yet," she said.
The BRC's Mr Robertson said that retailers have warned the Coalition Government that action is needed to reduce red tape and help them to create jobs to aid the economic recovery. The group has called for urgent action in this month's Budget.
"Against this background of deteriorating sales, the BRC has written to the Chancellor urging him to use his Budget to support retail's essential contribution to jobs and growth by avoiding new burdens and removing existing ones," said Mr Robertson. The proportion of UK homes bought without a mortgage has risen to the highest level for at least a decade, according to new research.
In the final three months of 2010, 40pc of UK housing transactions were by cash buyers, according to Savills, the highest level since the property agent began collating data in 2002.
Meanwhile, the Royal Institution of Chartered Surveyors says 26pc more property agents saw UK house prices fall rather than rise in February
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