UK retail sales slump continues

UK retail sales suffered the worst fall in 22 years during June, the CBI has reported.

According to the report, 42% of retailers said that their sales volumes had dropped over the year to June, while only 23% reported a rise in sales – a balance down 19%, compared with a 7% drop in May and 14% fall in April.

The CBI also reported that the three-month trend in sales, which has been falling since the beginning of the year, was the lowest since the survey began in 1983.

Grocery sales continued to increase strongly, the report found, with speciality food stores being the only other retail sector, which reported an increase. Firms which were largely dependent on the housing market, such as those selling furniture and carpets, hardware, china and DIY, all reported particularly poor sales.

Following an improvement in sales last month, footwear and leather sales fell sharply, while clothing sales remained weak, but showed some improvement compared with figures from April and May.

Commenting on the figures, John Longworth, Executive Director of ASDA and Chairman of the CBI DTS Panel, said that consumers had “clearly tightened their belts quite significantly”. He said that the slowdown in the housing market and an increase in energy bills meant that it “was not surprising” that retail sales had fallen.

Mr Longworth said that many stores had brought forward their summer sales over the past two weeks in an attempt to encourage shoppers into stores. He said: “A year ago retailers were reaping the benefit of ‘Euro 2004’, which was credited with boosting sales of everything from football clothing to TVs and beer. But while this may explain part of the record year-on-year decline now registered, there is no doubt that the underlying picture is also bad.”

(KMcA/SP)