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UK retail sales show surprise fall UK retail sales show surprise fall
(5 months later)
Activity in Britain's high streets this month dropped to its lowest level since August 2012 as a combination of stretched household budgets and cold weather kept consumers out of the shops.Activity in Britain's high streets this month dropped to its lowest level since August 2012 as a combination of stretched household budgets and cold weather kept consumers out of the shops.
The latest snapshot of retail spending from the CBI found that Easter had failed to arrest the downward trend in the business environment since last summer.The latest snapshot of retail spending from the CBI found that Easter had failed to arrest the downward trend in the business environment since last summer.
According to the CBI's monthly distributive trades survey, 37% of retailers said sales were down on their level in April 2012 while 36% reported an increase. The balance of -1 points was in sharp contrast to the buoyant trading conditions recorded by the employers' organisation in the autumn of 2012, when monthly balances of +30 percentage points were reported.According to the CBI's monthly distributive trades survey, 37% of retailers said sales were down on their level in April 2012 while 36% reported an increase. The balance of -1 points was in sharp contrast to the buoyant trading conditions recorded by the employers' organisation in the autumn of 2012, when monthly balances of +30 percentage points were reported.
Barry Williams, Asda's chief merchandising officer for food and chairman of the CBI distributive trades survey panel, said: "Retailers were frustrated this month by the ongoing stagnation in sales growth. This may be explained in part by the unseasonal weather we suffered, but there is no doubt that high street conditions are tricky with consumers lacking the confidence to go out and spend, as they still feel the pinch in their pocket."Barry Williams, Asda's chief merchandising officer for food and chairman of the CBI distributive trades survey panel, said: "Retailers were frustrated this month by the ongoing stagnation in sales growth. This may be explained in part by the unseasonal weather we suffered, but there is no doubt that high street conditions are tricky with consumers lacking the confidence to go out and spend, as they still feel the pinch in their pocket."
Clothing and footwear shops showed the biggest drop in sales in April, offset by healthier trading conditions for supermarkets and furniture stores, and online sales.Clothing and footwear shops showed the biggest drop in sales in April, offset by healthier trading conditions for supermarkets and furniture stores, and online sales.
The recent slowing in high street spending has made retailers cautious about the future. In May, 27% of firms expect sales to be higher than in the same month of 2012 while 33% fear they will be lower. Weak demand has led to retailers cutting their orders with suppliers, the CBI said.The recent slowing in high street spending has made retailers cautious about the future. In May, 27% of firms expect sales to be higher than in the same month of 2012 while 33% fear they will be lower. Weak demand has led to retailers cutting their orders with suppliers, the CBI said.
Only 18% of firms said sales were above average for the time of year while 45% said they were below average. The balance of -27 points was far lower than the +1 expected last month.Only 18% of firms said sales were above average for the time of year while 45% said they were below average. The balance of -27 points was far lower than the +1 expected last month.
Howard Archer, UK economist at IHS Global Insight, said the "disappointingly soft CBI distributive survey for April points to a poor start to retail sales in the second quarter, and fuels concern that consumers are reining in their spending as their purchasing power is squeezed by the move back up in inflation and low earnings growth. On top of this, the labour market is showing increasing signs of faltering after strong employment growth in 2012.Howard Archer, UK economist at IHS Global Insight, said the "disappointingly soft CBI distributive survey for April points to a poor start to retail sales in the second quarter, and fuels concern that consumers are reining in their spending as their purchasing power is squeezed by the move back up in inflation and low earnings growth. On top of this, the labour market is showing increasing signs of faltering after strong employment growth in 2012.
"The disappointing April CBI survey intensifies pressure on the Bank of England to come up with more quantitative easing and sooner rather than later, in addition to the extension just announced to the funding for lending scheme.""The disappointing April CBI survey intensifies pressure on the Bank of England to come up with more quantitative easing and sooner rather than later, in addition to the extension just announced to the funding for lending scheme."
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