Retail sales plunge in early September

Group Business Editor

Wednesday 28 September 2011

UK retail sales fell at their fastest year-on-year pace since May 2010 in early September, according to a survey from the Confederation of British Industry which highlights weak consumer confidence.

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ian mcconnell

The survey, published yesterday, will add to worries about the outlook for a UK economy which was all but stagnating even before the recent escalation of eurozone debt troubles and worries about the US economy.

This near-stagnation in the UK has occurred even before the bulk of the Conservative-Liberal Democrat Government’s cuts in public spending take effect.In the CBI’s latest monthly distributive trades survey, 39% of retailers reported sales volumes this month were down on September last year and only 24% said they were higher. The net 15% reporting sales were lower signalled the sharpest year-on-year drop in volumes for 16 months.A balance of 14% had reported a year-on-year fall in sales in August. This was a marked deterioration from the long run of solid year-on-year rises up until May and even from small annual declines in June and July.There was weakness in sales across the board in September with department stores, and clothing, furniture and carpet retailers suffering sharp year-on-year falls. Grocers recorded a modest year-on-year drop in sales in September.UK retailers predict another sharp year-on-year drop in sales in October. The CBI survey showed a sharp year-on-year fall in orders placed by retailers with suppliers in September, and this trend is expected to continue.Judith McKenna, chair of the CBI distributive trades panel and chief operating officer of supermarket group Asda, said: “Consumer confidence continues to be bruised by 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. With the consumer squeeze set to get tighter with the winter utility bills rise, we expect retailers will face a challenging October.”

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Retail sales plunge in early September

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