Blue April for UK Retail Industry as Sales Fell Unexpectedly

Released on = June 10, 2007, 10:25 pm

Press Release Author = Shushmul Maheshwari

Industry = Retail

Press Release Summary = UK retail industry has been recording impressive growth
since 2005 but it got a dent in April when, unpredictably, sales dove by 0.1% after
seeing a rise in March 2007.

Press Release Body = UK retail market recorded sales of over 246 Billion in 2004
that exceeded 255.56 Billion in 2006 at a CAGR of over 1.9%, according to a recent
report “UK Supermarket Analysis (2007-2010)” by RNCOS.

But despite the growth in last year, retail sales in UK, surprisingly, declined
strangely in April 2007, an indication that accruing interest rates, skyrocketing
prices, and huge debt may have started to impact consumer spending. Sales slumped by
0.1% after a 0.5% rise in March 2007, said the Office for National Statistics on May
18, 2007 in London.

Brits are spending more on clothes and food and they may have left them with few
pounds to spend on household goods. So the sales in household goods fell by over
2.67% leading to decline in overall retail sales. Sales at non-food stores descended
by 0.5%, offsetting a 0.2% gain at food stores.

Dresdner Kleinwort Group Ltd economist, Marchel Alexandrovich, London, said,
“Interest-rate increases will hit the consumer. When prices go up, it\'s more
difficult to shift volumes. We expect one more rate increase in August but that\'s
probably it”. Alexandrovich made the only prediction of a slump in sales.

However, the Bank of England is still of the view that consumer spending is
‘flexible’ and may present an ‘upside’ risk to retail
sector’s growth as Brits keep shopping. Recent figures showed a rise of over
2% on the month in ‘non-store retailing and repair’ – the group
that comprise of Internet retailers and catalogue based retailers. This category
witnessed a hike of more than 16.8% in the first quarter of 2007 from the last year,
the steepest rise since records stared in 1986.

According to the RNCOS report “UK Supermarket Analysis (2007-2010)”, the
key to success in UK market is product and service innovation to retain the existing
customers. However, the strategies of cost reduction by major players can be
disadvantageous for the retail industry as due to this, consumers are becoming more
price conscious.

The market research report prudently analyzes the UK Supermarket. The market
discusses the market performance and industry analysis with focus on factors
(political, economic, social, technological) affecting the market. The report also
presents an overview of the drivers, challenges and opportunities for the UK

About RNCOS E-Services Pvt Ltd.:

RNCOS, incorporated in the year 2002, is an industry research firm. It has a team of
industry experts who analyze data collected from credible sources. They provide
industry insights and analysis that helps corporations to take timely and accurate
business decision in today\'s globally competitive environment.

For more information visit:
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Contact Details = RNCOS E-Services Pvt Ltd.
Shushmul Maheshwari
Head of Business Development
29, 1st Floor, Patparganj Industrial Area, Delhi 92

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