Fall in UK retail sales eases

City A.M. Reporter
The decline in retail sales eased off in October, but the underlying trend remains weak despite and expected pre-Christmas pick-up, a survey by the Confederation of British Industry showed.

The CBI distributive trades survey's reported sales balance rose to -11 from September's -15, which economists had forecast to see repeated. Analysts had forecast a steady reading of -15.

The expected sales balance for November rose to +4, its highest since June, though the reported sales for the time of year fell to -34, its lowest since May 2009.

"High street sales remain difficult but the decline has stabilised, and retailers expect there to be some very modest growth next month in the build-up to Christmas," said CBI chief economic advisor Ian McCafferty.

"Family budgets continue to be stretched ... and consumer confidence is severely dented. High street retailers are heavily discounting as they aim to provide the best possible value on basics. But consumers will continue on the back foot as real incomes remain squeezed," McCafferty added.

Department store sales fell at their fastest pace since May 2010, clothing sales fell at their fastest pace since March 2009. Footwear and leather suffered its biggest fall in survey history. Grocers were up, entering positive territory, as did furniture and carpets, while growth in recreational goods and non-store sales also picked up.

British retailers have been coming under increasing pressure this year as consumers face the biggest squeeze on incomes in 30 years from soaring inflation and modest pay rises clamp down on spending.

Greetings card retailer Clinton Cards became the latest to report a dive in revenue and profits, while the British Retail Consortium said stores shed jobs at their fastest pace in two years in the three months to September.