Manchester-based Spar retailer Clearys has blamed spiralling property and wage costs for falling into the red.

Accounts filed at Companies House this week revealed a pre-tax loss of £41,502 for the year ending 30 June 2010 compared with profits of £26,783 the year before.

"Trading in the current financial year reflects the general trend in the economy and while every effort is being made to keep costs under control, trading results are not expected to show any significant improvements," said MD Mark Cleary.

Turnover from its eight stores rose 1.7% to £8.6m following the reopening of Clearys' Monton Manchester store after a fire at the launderette next door forced it to close in December 2008. Clearys said it expected its £73k insurance claim to be settled in the coming weeks.