Retail sales slowdown
CBI survey shows 18-month low
July 3 2002
The slowdown in UK consumer spending is confirmed by the latest figures from the CBI.
Sales grew at the slowest rate for 18 months in the year to June, according to the monthly Distributive Trades Survey.
Sales expectations for the month ahead have also slipped again.
Comparing sales with a year earlier, 45 per cent of firms said sales were up while 29 per cent said they were down. The balance of plus 16 in June compares with plus 25 per cent in May and plus 57 per cent in April.
The balance of plus 16 recorded for sales volumes in June is well below the expected plus 35 per cent. Looking ahead to July, retailers revised expectations downwards. Forty-four per cent of believe sales will improve, 11 per cent said they will decline, giving a balance of plus 33.
With sales continuing to disappoint, retailers have reduced stocks, with orders placed on suppliers rising at the slowest rate since April 1999. A balance of plus 21 in May
Alastair Eperon, Chairman of the CBI’s DTS Panel and a director of Boots, said: “It’s clear consumers are becoming less willing to spend. Poor weather in the first half of the month and one-off events such as the World Cup and the Golden Jubilee may have kept people out of the shops and exaggerated the effect in June. But longer lasting factors such as slowing earnings growth, stock market falls and pensions uncertainty could be making consumers more cautious.”
Few retailers recorded an acceleration in the rate of sales growth, with grocers were the only major exception. Retailers of confectionary, tobacco, newspapers, durable household goods, books and stationery reported slowing growth but were still experiencing substantial rises in sales volumes. The sharpest slowdowns in sales growth were reported by firms selling clothing, furniture and carpets. They recorded negative or no growth after robust growth in recent surveys.
