‘Tough' trading conditions continue on High Streets

Trading conditions continued to be on tough on the High Street last month, with nearly 50% of retailers reporting a drop in sales volume.

According to the latest figures from the Confederation of British Industry (CBI), only 29% of retailers reported sales volumes up on the year, while 47% reported a fall.

CBI Director General Sir Digby Jones has urged the Bank of England to cut interest rates, in order to maintain growth and consumer confidence.

Retailers have not seen an increase in annual sales since the end of 2004, reflecting continuing anxiety over the housing market, interest rates and tax increases.

The underlying sales trend fell to minus 15%, the lowest figure in the survey’s 22-year history.

However, while most retailers regarded sales as ‘poor’ for the time of year and had accelerated summer sale offers, there had been a slight improvement on the previous month’s figures in some areas.

The grocery sector continued to show strong growth, although not at the pace recorded last year, the CBI said.

However, the furniture and carpet sector has continued to fall rapidly, with clothing, confectionery, tobacco and news sales also falling at a “substantially faster” rate than in June.

However, the CBI found that retailers appeared to have been “largely unaffected” by the terrorist attacks in London on July 7.

Sir Digby urged the Bank of England to “get off the fence” over the issue of interest rates. He said: “As the risk of inflation remains low, a timely cut in interest rates by the Monetary Policy Committee on Thursday is essential to maintain growth and consumer confidence.

“The argument for a ‘wait and see’ approach is fading fast. It is time for the Bank of England to get off the fence.”

The CBI also said that retailers appeared to have been “largely unaffected” by the terrorist attacks in London on July 7.

However, figures released by retail business information group Footfall showed that the displacement of shoppers from central London to the outskirts, following the bomb attacks and attempted attacks on July 21, is continuing.

Figures for last week showed a 6.5% fall in the number of shoppers in central London last week and a 7% fall year on year. However, the surrounding retail areas saw an increase of 15.6% week on week and a 6% rise year on year over the same period.

Natasha Burton, Footfall marketing manager said: “The positive figures from outside the central area show that shoppers are continuing as normal – it’s just their destinations have changed. Busier trading further out may help those retailers whose trade isn’t solely based in central London, but for others, the hope will be that this trend is reversible and as confidence returns, the shoppers will also return. It will be an anxious wait to see whether the new shopper habits emerging can be broken.”

(KMcA/SP)