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New doubts about recovery as retail sales stall
New high street survey by CBI suggests consumers still under pressure
The CBI surveyed 125 retailers and wholesalers between September 25 and October 16
By Graham Ruddick
12:05PM GMT 28 Oct 2013
19 Comments
The recovery in high street sales has stalled, with consumers reining in spending over the last month according to new data.
The CBI said that 2pc more retailers reported a rise in sales rather than a fall during October, significantly below expectations of 31pc.
The business organisation's distributive trades survey warned that grocery retailers were among the worst affected by the slowdown in sales, with 17pc more retailers reporting a fall in sales compared to last year rather than a rise. This was the first decline in grocery sales volumes in eight months.
Howard Archer, chief UK economist at IHS Economics, said: "The survey fuels suspicion that GDP growth is likely to moderate in the fourth quarter from the robust 0.8% quarter-on-quarter expansion seen in the third quarter.
"With purchasing power currently being limited by consumer price inflation running well above earnings growth, it is likely that many people are feeling the need to rein in their spending at least temporarily, particularly if they want to build up their funds for spending over the Christmas period.
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"The key question is whether this is just consumers taking a breather before Christmas or the beginning of a significant period of consumer retrenchment?"
However, Richard Lowe, head of retail at Barclays, said the results of the CBI survey "should be viewed as a blip rather than a major concern".
The survey found that a positive balance of 23pc of retailers expect sales to grow over the next month, while 24pc said that sales volumes are above-average for the time of year.
Barry Williams, Asda chief merchandising officer for food, and chair of the CBI survey panel, said: “Although the high street recovery stalled this month, there is optimism that it was just a blip on the previous run of three months' growth.
"Retailers expect sales to pick up next month and are upping orders with their suppliers.
“It's also encouraging to see that signs are pointing towards increased consumer confidence - backed up by continuing growth in certain areas such as furniture and carpets, recreational goods, footwear and leather - all did particularly well in October.”
New high street survey by CBI suggests consumers still under pressure
The CBI surveyed 125 retailers and wholesalers between September 25 and October 16 By Graham Ruddick
12:05PM GMT 28 Oct 2013
19 Comments The recovery in high street sales has stalled, with consumers reining in spending over the last month according to new data.
The CBI said that 2pc more retailers reported a rise in sales rather than a fall during October, significantly below expectations of 31pc.
The business organisation's distributive trades survey warned that grocery retailers were among the worst affected by the slowdown in sales, with 17pc more retailers reporting a fall in sales compared to last year rather than a rise. This was the first decline in grocery sales volumes in eight months.
Howard Archer, chief UK economist at IHS Economics, said: "The survey fuels suspicion that GDP growth is likely to moderate in the fourth quarter from the robust 0.8% quarter-on-quarter expansion seen in the third quarter.
"With purchasing power currently being limited by consumer price inflation running well above earnings growth, it is likely that many people are feeling the need to rein in their spending at least temporarily, particularly if they want to build up their funds for spending over the Christmas period.
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"The key question is whether this is just consumers taking a breather before Christmas or the beginning of a significant period of consumer retrenchment?"
However, Richard Lowe, head of retail at Barclays, said the results of the CBI survey "should be viewed as a blip rather than a major concern".
The survey found that a positive balance of 23pc of retailers expect sales to grow over the next month, while 24pc said that sales volumes are above-average for the time of year.
Barry Williams, Asda chief merchandising officer for food, and chair of the CBI survey panel, said: “Although the high street recovery stalled this month, there is optimism that it was just a blip on the previous run of three months' growth.
"Retailers expect sales to pick up next month and are upping orders with their suppliers.
“It's also encouraging to see that signs are pointing towards increased consumer confidence - backed up by continuing growth in certain areas such as furniture and carpets, recreational goods, footwear and leather - all did particularly well in October.”
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