CBI: High street sales fall at fastest rate since 2008
A survey from the CBI has found that high street sales have fallen at the fastest rate since 2008.
According to their figures, August saw the fastest fall in sales volumes and orders since the financial crisis, with the wholesale industry also experiencing a decrease in orders at a rate that has not been recorded since 2013.
This poor performance has led to retailer’s confidence “crumbling.”
Beyond the decrease in sales and orders, employment in the sector also fell for the eleventh successive quarter.
Investment intentions for the upcoming year were also negative for the sixth consecutive quarter.
This indicates that shop owners are struggling with the rising costs of operating and the economic uncertainty caused by Brexit.
According to the CBI’s quarterly distributive trades survey, this trend is set to continue with retailers expecting the sharpest deterioration in business conditions since February 2009.
Anna Leach, the CBI’s deputy chief economist, said that 10 per cent of the respondents to their survey reported that sales had increased from the same point last year, with 58 per ent saying they had decreased. This gives a balance of -49 per cent.
Commenting on these results, Leach said: “Sentiment is crumbling among retailers, and unexpectedly weak sales have led to a large overhang of stocks. With investment intentions for the year ahead and employment down, retailers expect a chilly few months ahead.”
She added that: "It is unsurprising that business confidence has deteriorated sharply, with a potential no-deal Brexit on the horizon. But retailers are also buckling under the cumulative burden of costs, including an outdated business rates system and the apprenticeship levy.
"Businesses will be looking for government action in the budget in the coming months to alleviate some of these pressures.”
However, the CBI data contrasts with the official figures for the retail industry released by the Office for National Statistics’ survey.
According to the ONS, which also covers the online industry, web sales had increased in July and department stores had also recorded their first increase in a year.
Explaining this disparity, the CBI said that internet-based retailers had experienced a boost but volumes had dropped across most other sectors.
This follows news that over 50 major retail firms have written to the chancellor to ask him to reform the "broken business rates system."