Following the release of the British Retail Consortium (BRC) report, David Bush, head of Grant Thornton's Retail Services, has revealed that he was “extremely surprised” by its findings. The BRC reported that British retail growth had accelerated in June, recovering from a six month low, as consumers took advantage of price discounting.

Of the BRC's figures, which showed that like-for-like sales increased by three per cent in June on a year ago, Bush said: “These figures strongly contrast with our own research, which shows that the number of positive trading statements by listed retailers on the LSE for the second quarter of the year is at its lowest point in two years. In addition, the number of negative trading statements increased to levels not recorded for 15 months.”

In contrast Marks & Spencer has revealed that the like-for-like sales increase for the 13 weeks to June 30, is the lowest it has experienced for nearly two years.

“We regard Marks & Spencer as a good indicator of future trends in the retail sector. If they are highlighting a weakening in performance then the industry needs to sit up and take notice,” said Bush. “Clearly interest rates are beginning to take effect and we believe that one further rate rise will be required to find the tipping point where consumer demand is eventually dampened sufficiently.”

“We would also note that this month's results are up against extremely weak comparatives relating to when England was competing in the World Cup and the high street was largely deserted for the majority of June 2006,” he added. “This must be a key factor in the BRC reporting such a comparatively large increase in the like-for-like sales figures.”

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