High street sales fell more sharply than feared, and retailers expect the Christmas shopping period will be especially slow, the CBI said today.
The retail sector remains deeply gloomy about the future, and has cut investment plans amid predictions that the business situation will worsen over the next three months.
Responding to the CBI's latest Distributive Trades Survey, 16 per cent of firms said that sales were higher in the first half of November compared with a year ago, while 62 per cent said they were lower.
The resulting balance of -46% is a marked decline on October (-27%) and worse than retailers expected (-25%). Looking to the critical month of December, another strong fall in year-on-year sales volumes is expected (-40%).
The three month moving average of sales volumes, which irons out monthly volatility, remained as weak as in October (a balance of -33%). Sales for the time of year were weaker than expected and were reported as poor by a net 42% of retailers.
Weak consumer demand continued to hit the volume of orders placed upon suppliers, and a balance of 46% said that orders had fallen, which was worse than expected.
The rate of growth of average selling prices over the year to November has eased again, back from May's 16-year high, with a balance of 41% or retailers reporting prices rises. A further slowing in the rate of price increase is expected in December (+33%).
Retailers' confidence in their sector remained especially weak, and a balance of 37% expects the retail business situation to deteriorate over the next three months. This has crushed investment intentions, where a net 57% of firms plan to cut expenditure, which is the weakest figure since the survey began in 1983.
Employment conditions remained weak over the year to November, with a net 16% of retailers reporting that they had cut their headcount, although this rate of decline was less severe than in the last quarterly survey.