Jobless rise hits retailers

RETAIL sales fell faster than expected in July as consumers tightened their belts in the face of rising unemployment, the Confederation of British Industry (CBI) said yesterday.<br /><br />The CBI&rsquo;s monthly distributive trades survey sales balance was -15 per cent this month, an improvement on -17 per cent in June, but worse than the -12 per cent expected. Retailers also foresee conditions deteriorating in August. <br /><br />A net 32 per cent of respondents said that sales were poor for the time of year, while a net 27 per cent expects sales to remain below seasonal norms in August.<br /><br />Andy Clarke, chairman of the CBI Distributive Trades Panel and chief operating officer of Asda, said: &ldquo;Many retailers are having a difficult summer and no pick-up is expected in August.&rdquo;<br /><br />He adds: &ldquo;The recent sharp rise in unemployment will worry many consumers, and is likely to constrain sales growth in the months ahead.&rdquo;<br /><br />Motor traders&rsquo; sales volumes fell sharply in the year to July and a balance of 50 per cent expects motor sales to fall in August indicating that the initial boost to car sales from the scrappage scheme might not be as strong as had been hoped.<br /><br />While the CBI survey showed a modest improvement, Vicky Redwood at Capital Economics said: &ldquo;We remain nervous about what might happen once the support from the good weather fades and the drag on household incomes from rising unemployment and slowing pay growth intensifies.&rdquo;<br /><br />She cautions that the British Retail Consortium&rsquo;s survey, due on 11 August and covering all of July, may not be quite so upbeat.