Grant Thornton research has revealed that the number of positive trading statements issued plummeted to a low not witnessed for nearly two years over the second quarter of 2007; but the food sector has managed to ride the storm.

The number of negative trading statements increased to levels not recorded for 15 months. Yet the food sector stayed head and shoulders above its retail rivals, with every food retailer listed on the London Stock Exchange showing a like-for-like and total sales increase during the quarter. In addition, not a single profit warning was issued by food retailers.

But non-food retailers saw increases in like-for-like and total sales fall considerably, and profit warnings issued were at similar levels to the previous quarter.

The Grant Thornton Quoted Retail Companies Index has shown that nearly one-third of retailers posted positive trading statements between April and June 2007, down from 44 per cent in the first quarter. This is the lowest such figure since the third quarter of 2005, when only 22 per cent of listed retailers issued positive statements.

The number of negative statements released rose to 19 per cent in the last quarter, up from 10 per cent in the first three months of the year and the highest figure seen since the first quarter of 2006.

David Bush, head of Grant Thornton’s retail services team, said: “Food and drink retailers continue to go from strength to strength in the UK and have benefited from strong consumer demand over the past quarter. A number have even managed to introduce some selling price increases over the past quarter. However, for non-food retailers, a stark contrast is emerging, with consumers evidently cutting back on big-ticket, discretionary spending.”

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