Retail sales fall causes job cuts
RETAILERS are taking a beating as consumers tighten their belts, according to the Confederation of British Industry’s (CBI) distributive trades survey, published yesterday, and the GfK consumer products study, out today.
Almost half of retailers saw sales fall in the year to November, compared with 29 per cent who experienced an increase – a far weaker picture than the CBI’s economists expected.
A net balance of 39 per cent reported below average sales for the time of year – the largest proportion since March 2009.
In terms of jobs, 40 per cent reduced employment this month while just 13 per cent increased it.
“The relatively mild weather this autumn has hit clothing stores particularly hard, and retail sales are down year-on-year for the sixth month in a row,” said the CBI’s chief economic adviser Ian McCafferty.
“Retailers may be hoping that shoppers will loosen their purse strings in the run-up to Christmas, but consumers are likely to remain cautious about spending, given the uncertain economic outlook.”
However, that looks unlikely, according to shoppers polled about their likely shopping habits over the next month.
The GfK study, out today, showed 36 per cent of consumers claim they will be cutting back this Christmas, up from 26 per cent last year.
The outlook for next year is not positive either – 69 per cent fear the Eurozone crisis’ impact on the UK economy, and 64 per cent expect the economic situation to get worse before it gets better.
“It is hard to be optimistic over the prospects for consumer spending,” said Howard Archer, chief European and UK economist at IHS Global Insight.
“Consumer confidence is at near record low levels, with purchasing power under severe pressure from high inflation, muted wage growth and tight fiscal policy.