Retail sales see slowest growth in three years

Concerns over a potential rise in interest rates had a dampening effect on retail sales in June, a new report suggests.

The British Retail Consortium (BRC) survey said like for like sales were down 0.8% last month, compared to the same period in 2013, when they had increased 1.4% on the preceding year.

Total sales were up by just 0.6%, marking the lowest growth since May 2011, if annual volatility caused by a late Easter is excluded.

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David McCorquodale, head of Retail at KPMG, which sponsors the study, said: "June saw the brakes applied to spending as shoppers put purchases of big ticket items on hold whilst they waited to see if the Bank of England would take action on interest rates.”

Sales of home accessories, furniture and food fell flat last month, but clothing retailers fared better, with “glorious sunshine” driving demand for summer garments, said McCorquodale.

"These steady sales mean that most fashion retailers have not resorted to the deep discounting we have seen in previous years, and this will help them to hold on to their margins," he added.

"Looking forward, retailers have two months of tough comparables coming up after Murray mania, a heat-wave and the arrival of the royal baby boosted sales last year. This past performance will make like for likes look challenging over the next quarter."

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