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Retail sales dive as Britons tighten belts

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By Lee Wild

Date: Tuesday 14 Oct 2008

LONDON (ShareCast) - Shoppers are keeping their hands firmly in their pockets and steering clear of big ticket items as the weak housing market and turmoil in the financial markets continues to frighten many Britons.

The worst performance for at least eight years among furniture retailers was partly to blame for a 1.5% drop in like for like retail sales in September, according to the British Retail Consortium (BRC).

Sales have now fallen in six of the past seven months, making it the worst run since the summer of 2005. It would’ve been even nastier but for a few sunny weekends, which helped shift Hawaiian shirts and flip flops.

Consumers are now looking for real value from stores as household budgets are pressured by rising energy bills, expensive fuel and higher food costs.

“Impulse buying is disappearing as people consider purchases carefully and actively seek out promotions,” said Stephen Robertson, Director General of the BRC.

“Inflation is behind much of the growth in food, and this is the main driver of overall performance,” noted Helen Dickinson, Head of Retail at KPMG.

“The key question now is not what has happened but what will be the impact of the current environment on sales over the crucial Christmas trading period - many will be holding their breath.”

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