The Economy Gloom on the High Street
Business: The Economy Gloom on the High Street
High street sales growth came to a standstill last month for the first time in almost three years, according to a survey by the Confederation of British Industry.
The CBI’s August Industrial Trends survey found retail sales growth froze for the first time since September 1995, while expectations of future growth were also at a three year low.
Only 32% of retailers reported increased sales volumes compared with the same time a year ago, while 34% said they were down, leaving a negative balance of 2%.
The CBI has been calling for an interest rate cut
July saw a positive balance of 6%, while June saw a positive figure of 19%.
Alistair Eperon, chairman of the CBI’s distributive trades panel said: “The weaker underlying trend and the reported fall in optimism about the business situation suggest that higher interest rates and the fading hope of the boost from windfall spending are depressing retail demand.”
Stormy weather
Mr Eperon said the lack of growth may also reflect the impact of the poor August weather.
But even taking this into consideration, it still paints a bleak picture of the economy, with the underlying trend in sales growth falling to its weakest point since November 1995.
The survey found chemists and clothing stores reported the strongest growth.
Furniture, hardware, china, DIY stores and off-licenses had the worst month.
Inflation was also running at a three year low, the survey found, with similarly low levels expected in the year to September.
Slowdown in employment
Employment growth also slowed considerably, with a distinct slowdown in part-time recruitment.
Shops have downgraded plans to invest in their businesses.
Sales from wholesalers picked up, however, with volumes expected to grow in September.
However, employment at wholesalers fell at their sharpest rate since February 1994, despite hopes of a pick-up.
Sales from motor traders meanwhile rose for the first time since April but were expected to dip this month.
The survey covers 15,000 outlets of companies in the retail, wholesale and motor trades.
source:bbc News
Add comment February 10th, 2007