|Chelmsford's High Street. |
Sales on the UK high street were flat in August compared to a year ago, broadly
in line with retailers’ expectations, but sentiment about the business situation
deteriorated sharply according to the CBI, Britain's principal business lobbying
In the CBI’s latest quarterly Distributive Trades Survey, conducted over the
first two weeks of August, 27% of retailers reported an increase in their volume
of sales compared to a year ago, while 31% said they had seen a fall. The
resulting rounded balance of -3% was broadly in line with expectations of +3%.
Sales volumes also fell further below the average for the time of year (-27%).
Twelve of the thirteen retailing sub-sectors saw a slowdown in the pace of
year-on-year sales growth this month. Only the footwear & leather sub-sector
bucked the trend with a modest acceleration in growth to +58% from +42% in July.
In line with the weakening in sales growth, orders placed by retailers with
suppliers were down when compared with the previous year (-11%), falling at
their fastest rate since January 2012.
Elsewhere, year-on-year shop price inflation fell back considerably (+31%), and
is now at its lowest since November 2009 (+17%). Retailers expect to raise
prices at a similar year-on-year rate next month (+32%).
The number of people employed in the retail sector was down on a year ago
(-25%), following a rise in the previous quarter. Retailers expect to reduce
headcount further in the coming month (-12%). Furthermore, investment intentions
for the year ahead remained negative (-13% is below the long-run average of 0%),
but were less negative than at the turn of this year.
But looking ahead, sales are expected to rise slightly on a year ago next month
(+6%), and to be slightly stronger compared to seasonal norms (-15%).
Nonetheless, with a balance of -17%, retailers expect the business situation to
deteriorate over the next three months, with sentiment weakening more than at
any time since February 2009 (-26%).
Chair of the CBI Distributive Trades Panel and ASDA Chief Operating Officer,
said: “Although this summer’s events created a mood of celebration across the nation,
these figures would suggest this positivity did not extend to the high street.
“However, although retailers expect the overall business situation to worsen in
the coming three months, they still expect sales to rise year-on-year in
In the wholesale sector, both the volume of sales (-32%), and orders placed upon
suppliers (-42%) fell sharply, with both results failing to meet expectations
(+8% and +1% respectively). Further falls in sales volumes (-29%) and orders
(-23%) are expected in September.
In motor trades, sales volumes fell (-10%) as expected (-11%), though firms
expect sales to grow slightly in September (+4%).
The survey was conducted between 26th July and
15th August 2012. 134 firms took part, of which 76 were retailers, 47 were
wholesalers and 11 motor traders.
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