High Street dips after April recovery

Retail sales fell for the second month running in the year to June, following April?s brief respite.
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Accoeding to latest figures from the CBI, the decline, broadly in line with retailers’ expectations, was no worse than in May, however, and less severe than falls recorded between July 2008 and March 2009.

In the CBI’s latest Distributive Trades Survey, while 31 per cent of retailers said year-on-year sales volumes rose in the first two weeks of June, 48 per cent said they were down, giving a balance of -17 per cent.

Retailers expect sales to fall slightly faster in July, but this balance of -21 per cent is similar to expectations for June (-20 per cent).

Sales for the time of year were said to be poor by a net 15% of retailers, though this was less negative than in May (a balance of -36 per cent). They are expected to be similarly below par in July (-13 per cent).

The three-month moving average, which smooths out monthly peaks and troughs, remained negative (a balance of -10 per cent), though was the least negative for over a year (-9 per cent in April 2008).

For the second month running, the balance of retailers saying volumes of stocks were more than adequate to meet demand was below the long-term average, with a balance of plus-six per cent the lowest since June 2007 (plus-six per cent).

Reflecting this, orders placed by retailers with their suppliers were cut at the slowest rate since March 2008 (a balance of -10 per cent). Retailers expect they will fall slightly faster in July (-14 per cent).

Elsewhere, there were particularly marked declines in durable household goods, hardware, china & DIY and clothing. After two months of strong growth, sales in footwear & leather shops were merely flat.
Andy Clarke, Chairman of the CBI Distributive Trades Panel, and Chief Operating Officer of Asda, said: "June's weak sales figures show that business on the high street isn't getting any easier. The one consolation for retailers is, it isn't getting any worse, and the dark days of the winter are behind us.

"It is too early to foresee a sustained pick-up in retailers' fortunes over the coming months, and the savviest retailers will continue working hard to offer consumers the best possible value for money."

Sales volumes in the wholesale sector fell in the year to June at a faster pace than in the previous two months, though the balance of -36% was less negative than expected (-48%). A similar rate of decline is expected in July and, if it occurs, would be the thirteenth consecutive month of falling sales.


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