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Small Growth in UK Retail Industry in 2008
May 05, 2008

UK retail sales grew only slightly during February 2008 due to rise in commodity prices and competition among retailers and supermarkets, according to BRC.
 
According to the figures released by the British Retail Consortium (BRC), the British retail industry grew by 3.9% in February 2008, a slight improvement against January 2008 but the growth did not bring much cheer for retailers of the country, as reported by Theherald.
 
The British food sector was largely responsible for this marginal growth as the commodity prices increased substantially. Another reason for growth in the UK retail sale was Mothering Sunday on March 2, 2008. Sales of this day were included in the previous month retail sale. 
 
Apart from this, burgeoning competition among the UK retailers and supermarkets to leverage more benefits partly contributed to the retail sales in February 2008. Besides, retailers and big markets launched promotional and discount schemes to foster growth in the dwindling UK retail market and to fetch consumers to shops and stores.
 
Members of Monetary Policy Committee of the Bank of England are content with the slow growth in the consumers spending as shown by the slight improvement in the UK retail sale. The members were worried about decline in consumer spending because of higher mortgage payments, increasing energy bills, and tight credit availability.
 
Nevertheless, the UK retail sales easily overcame from jitter of the January 2008 when clearance sales attracted consumers temporarily. The process of belt tightening began in February 2008 because the bills of shopping during Christmas and New Year reached homes.
 
Despite all this, BRC officials are concerned about the future retail sales in the country. As per the survey by Manpower, a consultancy services providing firm, companies in the UK planned not to recruit more people for the second quarter of 2008. BRC also revealed that high inflation rate may force the Bank of England to limit its cutting down of interest rates.

According to a research analyst at RNCOS, “As the Brits become very selective and fussy, the retailers have to come up with attractive offers and lucrative schemes to entice consumers to make them spend on goods during crucial Easter season during March 23-April 27, 2008. However, shoppers are very conscious with regard to spending and discount schemes can only attract customers to buy.”

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