Retail sales and orders have plummeted at their fastest since the financial crisis, according to a new survey that suggests optimism in the industry has plunged to a 10-year low.
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A report from the Confederation of British Industry (CBI) has found that retail sales volumes and orders both fell at their sharpest rate since December 2008 in the year to August.
Companies in the retail sector are also expecting further trouble in the months ahead, with industry sentiment falling to its lowest levels in more than a decade.
“Sentiment is crumbling among retailers, and unexpectedly weak sales have led to a large overhang of stocks. With investment intentions for the year ahead and employment down, retailers expect a chilly few months ahead,” said Anna Leach, CBI’s deputy chief economist.
Employment in the sector also fell for the eleventh straight quarter in August.
The data is fresh evidence of trouble on the high street, coming after a torrid 12 months for many bricks-and-mortar retailers which have been battling rising costs and more competition from online rivals.
In recent months a number of high street giants including womenswear retailer LK Bennett, department store group Debenhams and restaurant chain Jamie’s Italian have all collapsed, while dozens of other brands including Sir Philip Green’s fashion empire pressed ahead with dramatic cost-cutting plans.
Howard Archer, chief economic advisor at the EY ITEM Club, said: “Admittedly, actual retail sales have recently tended to be stronger than indicated by the CBI’s survey and latest actual data from the ONS show retail sales held up pretty well in July.”
He added: “Nevertheless, the serious weakness of the August CBI survey showing the sales balance at the lowest level since December 2008 at -49 per cent is concerning.”
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