CBI: Retail sales weaken in September

Kay Mitchell | September 27, 2011 | 0 Comments

According to the latest Confederation of British Industry (CBI) distributive trades survey, the volume of sales on the UK High Street were lower this month versus a year ago.

The figures suggest continue to be cautious about the economic outlook and rein in their spending on the back of rising unemployment, higher inflation and slow wage growth.

The CBI’s survey established that 24% of retailers saw sales volumes rise on an annual basis, while 39% reported a fall.

As a result, the balance fell to -15% - the lowest since May 2010.

The survey, which was conducted between 25 August and 14 September, discovered that most sub-sectors suffered with falls in department stores, clothing, footwear, furniture and carpets.

Commenting on the figures, Judith McKenna, chair of the CBI Distributive Trades Panel, said: “High street sales are sluggish but appear to be stabilising.

“However consumer confidence continues to be bruised by a combination of low wage growth, high prices and rising unemployment. Shoppers are still clamping down on discretionary spending and focused on buying the basics at the best price.”

Ms McKenna, who is also ASDA’s chief operating officer, added that consumers will continue to struggle with the winter utility bills hike and, as a result, retailers will face a challenging October.

The survey questioned more than 130 firms, of which 74 were retailers, 50 were wholesalers and 15 motor traders.

The figures tie-in with other reports about the High Street after accountancy firm BDO recently warned Britain’s retailers should prepare themselves for some tough times as pressure builds on consumers in the run-up to Christmas.

Several well-known retailers have recently reported falls in sales volumes with the John Lewis Partnership, which is regarded as a barometer of British retailing, recently reporting a marginal increase in sales but said trading conditions are “extremely challenging”.

The renowned employee-owned chain, which owns the Waitrose supermarket group, said sales rose 1% on a like-for-like basis in the six month period to 30 July.

However, across the group, first-half pre-tax profits slumped by 18% to £90.4 million.

Earlier this month, Home Retail Group announced a drop in sales at both its Argos and Homebase chains, while electrical goods chain Dixons Retail also posted a fall in sales.

Today meanwhile, Game Group, which sells computer and video games, consoles and accessories, said it made a pre-tax loss of £51.5 million in the six months to July 31, against a loss of £21.5 million in the same period a year earlier.

The company typically makes its profit in the latter half of the year when sales are boosted by the crucial Christmas trading period. However, it expects conditions to remain challenging for the remainder of the year.

Tags: cautious, CBI, challenging, conditions, Confederation of British Industry, consumers, distributive trades survey, High Street, retailers