By Maximilian Clarke
Retail sales in the UK have fallen over the year ending October, through remain broadly in line with last month’s figure. Retailers, however, remain optimistic, anticipating stronger sales growth over the Christmas period.
24% of companies questioned by the Confederation of British Industry reported sales volumes rose compared to a year ago, while 36% reported a fall, giving a rounded balance of -11%. The volume of sales was poor for the time of the year, and was the lowest since May 2009 (-36%). Sales volumes in most sub-sectors declined: there were particularly rapid falls in footwear & leather (-98%), hardware & DIY (-75%) and clothing (-39%). But the grocery and furniture & carpets sectors saw their sales volumes increase on a year ago (+11% and +34% respectively), compared to (-3% and -59%) last month.
“High street sales remain difficult but the decline has stabilised, and retailers expect there to be some very modest growth next month in the build-up to Christmas,” commented CBI Chief Economist, Ian McCafferty.
“Family budgets continue to be stretched because of a combination of high inflation, low wage growth and soaring unemployment, so consumer confidence is severely dented. High-street retailers are heavily discounting as they aim to provide the best possible value on basics, but consumers will continue on the back foot as real incomes remain squeezed.
“However, price pressures will likely ease next year as the impact of the VAT rise on inflation falls away.”
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