Fitch Ratings says the recent positive trading results in the UK retail sector are partly due to temporary factors, and that the weak health of the UK consumer may preclude a lasting recovery until 2011.
“Rather than signalling an economic recovery, the recent better than expected trading results have been boosted by temporary factors such as weather and early aggressive promotional activities and clearance sales”, says Ching Mei Chia, in Fitch’s Retail and Consumer Products Team.
The warmer spring and early summer weather compared with last year’s rainy spring, and better weather coinciding with the Easter holidays, all contributed to improved sales.
Secondly. high-street retailers, especially clothing retailers, brought forward summer sales by as much as a month, starting in June instead of the usual July period. This has supported sales growth, though likely at the expense of margins.
