The latest figures from the CBI’s quarterly Distributive Trades Survey has painted a worrying view of the high street.
The report showed that retailer sales volumes fell in August at their fastest pace for over a year with retailer sentiment the most negative it has been since February 2009, the first quarter after the financial crisis hit the UK.
The latest survey said that while 31 per cent of retailers saw an uplift in sales for the fortnight to 16 August for 46 per cent of retailers volumes of sales fell despite the massive Sales push by many retailers. The resulting rounded balance of -14 per cent was the most negative since May last year when the figure was -18 per cent.
The survey also showed that a balance of -11per cent of retailers were more negative about the business economy for the next quarter than the previous one. Such sentiment was the most negative for 18 months.
For the year to September retailers expect the volume of sales to fall again but at a slower pace, a balance of -7 per cent.
Judith McKenna, chair of the CBI Distributive Trades Panel and ASDA chief operating officer, said: “As expected, August was a tough month on the high street. Sales volumes fell at a pace not seen in over a year, as consumers have continued to see their real incomes squeezed by a combination of inflation and weak wage growth.
“This survey suggests that prices will rise more slowly in the coming months, and savvy retailers will continue to offer consumers the lowest prices possible, but with energy and commodity costs still high, families’ spending power looks like being constrained for some time.”
Retailers will hope that sales will have picked up over the Bank Holiday weekend and next week as back to school begins.