Harry Potter Effect Short Lived
By Claire West
High street spending continued to grow in September, despite five interest rate rises in a year and the recent crisis of confidence in the financial markets, according to the latest CBI retail survey. But the trend of slower growth in retail sales seen since May continued.
Thirty-seven per cent of retailers reported that sales had risen on a year ago against 25% that said they were down. The resulting balance of +12% falls short of pre-financial turmoil expectations (+17%) and was the lowest balance this year.
This sales growth nevertheless remains above the average rate recorded during...
...the second half of 2006. Retailers also thought sales were around average for the time of year and expect the more moderate growth in sales to be sustained into October.
Sales of big ticket items, such as consumer durables that are often linked to people moving house, fell for the fifth month in a row, reflecting the current fragility in the housing market. Sales of furniture & carpets and hardware & DIY maintained a healthy pace, suggesting people are redecorating rather than moving home.
This snapshot was contained in last Thursday’s CBI Distributive Trades Survey, which was conducted between 30 August and 19 September and covers more than 20,000 outlets and 40% of retail jobs.
The three-month average, which reflects the underlying trend in sales volumes, slowed slightly to a balance of +15%.
There were mixed fortunes across the subsectors. The 'Harry Potter' effect, which lifted book sales last month, proved to be short-lived with booksellers & stationers recording the weakest sales balance in the 23-year history of the survey (-77%).
Sales of shoes and leather goods continued to grow, but dropped back (to a balance of +49%) from the levels seen in the last five months, while clothing... continued on page two >