Shop prices underperformed inflation in June, while retail sales growth slowed, according to figures released by the British Retail Consortium (BRC) and the Confederation of British Industry (CBI).
High street prices increased by 0.73 per cent in June compared with May, but continued to be outpaced by inflation and the rate of increase in retailers' costs, according to the BRC's Shop Price Index. Warm weather in June encouraged demand and there was less promotional activity than usual, the BRC study found.
Director general Bill Moyes said: 'This is not an environment where the sector can face further Government-imposed business costs without investment, expansion and job creation suffering.'
Meanwhile, the CBI published a survey showing sales growth in June remaining below the average of the past decade for an eighth successive month. Of 170 retail respondents, 29 per cent said their sales volumes had dropped compared with June last year, while 39 per cent reported an increase.
According to the CBI, figures were particularly disappointing considering that sales in June 2002 suffered from a slump in demand caused by the Jubilee bank holidays, a later than usual half-term and the World Cup.
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