Retailers hit by riots as latest sales figures fall

The Office for National Statistics (ONS) said that, while it was impossible to quantify, there was evidence the widespread looting had an impact on retail trade.

However, some stores believed they benefited from the riots as consumers altered their shopping behaviour by seeking alternatives to shops that had closed.

The latest negative high street survey added to a flurry of downbeat data from the sector that has been hit by rising joblessness due to the government’s austerity programme, higher inflation and consumer caution.

The drop in August sales volumes, following 0.2 per cent growth in July, ranged across most retail sectors, with department stores among the worst affected, closely followed by computer and telecoms businesses.

The John Lewis group revealed on Wednesday that interim profits at its department stores had slumped by more than half.

While the ONS figures yesterday were modestly better than expected, City economists said the outlook for the retail sector was bleak, and added to the pressures on the Bank of England to start a second round of asset purchases to boost growth.

Sales volumes in August did not grow at all on the year – the weakest performance since December 2010. Underlying sales in the three months to August rose 0.3 percent, and have been virtually flat for most of the last year.

“The big picture view here is that the consumer will remain under pressure for a prolonged period of time,” said Amit Kara, an economist at UBS.

A retail analyst said: “Anyone showing any sort of resilience in the sector is a standout. The overall picture, as this data shows, is of a retail industry barely keeping its head above water.

“There doesn’t seem any early light at the end of the tunnel, either.”