RETAIL SALES FALL AGAIN - CBI SURVEY
The volume of retail sales fell again in the year to April, the most significant year-on-year fall since July 1992, according to the CBI's monthly Distributive Trades Survey, published today (Tuesday).
Forty-six per cent of retailers said their sales volumes were down in April compared with 32 per cent saying their sales were up - a balance of minus 14 per cent, which compares with a figure of minus 9 per cent in the March survey. This is despite retailers' expectations in March that sales would stabilise.
Sales volumes were also considered to be poor for the time of year - by a margin of 36 per cent of companies. In response to the fall in sales, 37 per cent of retailers cut their orders to suppliers, compared with 30 per cent who increased their orders - a balance of minus 7 per cent. Stock levels continued to rise in relation to expected demand.
There was poor trading in most sectors - particularly for chemists and for the furniture and carpets sector - and clothing sales fell for the first time since March 2004. By contrast household durables had another strong showing, probably due to technology products like I-Pods and DVDs. Booksellers & stationers, and grocers, were the only others of eleven sectors to show sales growth.
There was a somewhat more positive outlook for wholesalers, with sales volumes stabilising over the year to April - contrasting with last month's very weak results. However their sales remained below the average for the time of year.
For motor traders, sales continued to fall over the year to April, in line with their March expectations. It was the eleventh successive month in which sales of new vehicles fell year-on-year, whilst sales of parts and accessories were unchanged over the same period. Looking ahead, motor traders expect a slightly steeper decline in sales in the year to May.
CBI Chief Economic Advisor, Ian McCafferty, said:
"Tough trading conditions are continuing for most retailers, despite expectations last month that the position would stabilise. This ongoing decline in sales is likely to reflect the recent fall in real disposable incomes, higher fuel and utility bills, reduced activity in the housing market and higher mortgage rates than a year ago.
"The figures from the automotive sector are a reminder of the highly competitive sales market which contributed in part to MG Rover's collapse."
"These results add further weight to the argument against a premature rise in interest rates."
3 May, 2005
Notes to Editors:The Distributive Trades survey covers 20,000 outlets of firms responsible for 40 per cent of employment in retailing. It includes measures of sales activity across the distributive trades. It was first introduced in 1983 and the retail results form the UK component of the EC survey of retail trades. The survey was conducted between 30 March and 20 April 2005. There were 229 responses.
Media Contact:CBI Press Office on 020 7395 8239, or out of hours pager 07623 977854.