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High street sales down despite summer celebrations

Published:  23 August, 2012

The summer's events may have created a mood of national celebration, but positivity has not followed through on to the high street, according to CBI's quarterly Distributive Trades Survey.

The survey, conducted over the first two weeks of August, revealed 27% of retailers reported an increase in their volume of sales compared with a year ago, but 31% said they had seen a fall.

This equated to a slight fall of -3% overall, which was broadly in line with expectations.

Sales volumes also fell further below the average for the time of year (-27%) and 12 of the 13 retailing sub-sectors saw a slowdown in the pace of year-on-year sales growth this month.

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 wholesale sector has also taken a hit with 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.

Employment has likewise been affected, with the number of people employed in the retail sector falling (-25%) on the year, following a rise in the previous quarter. It means retailers expect to reduce headcount further in the coming month (-12%).

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%).

Judith McKenna, chair of the CBI Distributive Trades Panel and Asda's 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 September."