Shoppers cash in on discounts

Female shopper

High Street retailers enjoyed a pick-up in business in July as consumers loosened their purse strings, official figures have revealed.

Retail sales rose 0.4% in July, taking the annual gain to 3.3% - its highest point since May 2008, the Office for National Statistics says.
This follows on from an exceptionally strong June when sales soared by an upwardly revised 1.3%.
The higher-than-expected gain was boosted by higher spending on furniture and electrical goods. Sales from household goods stores lifted 4.5% on the month - the highest since August 2006.
However, sales of clothing and footwear were down 0.4% on June but still stood 10.3% higher than July 2008. Food sales were also on a downhill slope in July.
Economists have been attributing much of the recent sales rises to early summer discounting.

Vicky Redwood, UK economist at Capital Economics, says: “The retail sector clearly has built up a decent amount of positive momentum, which could well last a few months more. But we remain pretty gloomy about the outlook for sales further ahead – not least because of the looming tax rises on the horizon.”

The rate of VAT is due to return to 17.5% after a temporary period at just 15%.

The latest high street figures mirror those released by the British Retail Consortium earlier this month. Like-for-like sales, which discounts the impact of new store openings, increased by 1.8% last month compared with July 2008.

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