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UK October Retail Sales See Biggest Drop in 3 Years

Tuesday, 11 Nov 2008 | 1:28 AM ET

British retail sales fell for a fifth straight month in October on a like-for-like basis and by the biggest amount in more than three years, a survey showed on Tuesday.

CNBC.com

The British Retail Consortium said like-for-like sales values were 2.2 percent lower last month than in October 2007. That was the biggest fall since May 2005 and meant sales have fallen on this measure for seven of the past eight months.

Total sales values, which include new floor space, were lower than a year ago for the first time since April 2005, falling 0.1 percent.

"These are seriously poor numbers, especially in the run-up to Christmas," said Stephen Robertson, director general of the British Retail Consortium.

"The negative sales figures reflect record low consumer confidence. These are tough times for families and retailers."

The survey showed sales of clothing and footwear remained poor despite colder and much wetter weather than last October, with discounts and promotions often failing to tempt customers.

Food and drink, traditionally defensive in economic downturns, was the only sector to show sales significantly up on a year ago, although October's year-on-year gain was the weakest since March.

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The Bank of England last week slashed interest rates by 1.5 percentage points to 3 percent, a move retailers hope will boost sales as the vital Christmas shopping period gets underway.

But Helen Dickinson, head of retail at KPMG, said it would take several months for rate cuts to feed through into spending.

"There is no doubt retailers will need to resort to heavy discounting to bolster sales over this crucial trading period," she said.