A Survey Released By The CBI Has Shown Retail Sales Remain Sluggish

A new survey released by the Confederation of British Industry (CBI) has shown high street retail sales are stalling.

Income across stores was flat in the year to October, but substantial growth is expected to return next month because of the Christmas rush, with this period the first time in a number of years that consumer confidence has increased before the festive season, which may boost sales.

Retail remains a popular sector for SMEs, but while macro-economic forecasts indicate national trends, many business owners remain focused on their local area's footfall levels as a more accurate measure of growth.

It was grocers that saw the largest fall in sales, with year-on-year volumes down by a full 17 per cent - partially due to increased competition and heightened global food prices.

Not every sector saw poor figures, however, and footwear stores recorded growth of 37 per cent, while chemists performed even better (67 per cent).

Barry Williams, Asda's chief merchandising officer for food and chair of the CBI distributive trades survey panel, said: "Though 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. Signs are pointing towards increased consumer confidence - backed up by continuing growth in certain areas such as furniture and carpets; recreational goods [and] footwear and leather."

Motor traders have also been buoyed by increased demand and 94 per cent of companies in this sector said sale volumes increased in the year to October, while zero per cent listed a fall.

This is particularly important because analysts and investors place heavy stock in customers' ability to put money into big purchases like fridges, freezers and cars, as this indicates consumer confidence.

The CBI Distributive Trade Survey was conducted between September 25th and October 16th 2013, with 125 firms taking part.

Expert Opinion

A large proportion of the UK’s SMEs are retailers so it is disappointing to see that sales on the High Street have stalled. <br/> <br/>“Consumer confidence does remain high however and it is hoped that this is a blip rather than any long-term negative trend. SMEs in the retail sector have a wonderful opportunity to grow, particularly in the run up to the festive period, and it is vital that they ensure that they are well prepared to take advantage. <br/> <br/>“Retailers have a host of issues to deal with at this time, not least those in relation to staffing and also cashflow management. Businesses must ensure that they are on top of these issues from a legal point of view and seek legal advice if they have any concerns.” <br/> Fergal Dowling - Partner