Retail sales hit 25 year low

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Date: Thursday 28 Aug 2008

LONDON (ShareCast) - Things have got even worse for hard pressed retailers as a wet August kept money conscious shoppers off the high street, according to the CBI.

Its latest Distributive Trades Survey revealed that 60% of respondents said sales in the first half of August were lower than a year ago, with just 13% reporting a rise.

The resulting rounded balance of -46% was much worse than the -32% expected and the weakest figure since the CBI started the survey in 1983. A similar drop is predicted for September as business confidence remains weak.

The economic slowdown has taken its toll on jobs as well, with a net 31% of retailers reporting that their headcount is lower than a year ago. More jobs are expected to go next month.

Sectors linked to the troubled housing market like durable household goods and furniture & carpets, continued to face very difficult conditions. Sales for footwear & leather retailers fell for the first time this year.

“The downturn in the housing market is continuing to depress sales for those shops selling big-ticket items,” said Andy Clarke, Chairman of the CBI Distributive Trades Panel, and Retail Director of Asda.

"This month's report also highlights that as disposable incomes tighten, food retailers fare better than the rest of the market. Shoppers will continue to be forced to look around for the best value on offer for all their purchases - not just their groceries."

“No let up is expected as we head into early autumn,” added Ian McCafferty, CBI Chief Economic Adviser. “The business outlook is particularly weak and retailers are having to scale back their employment and investment plans in an attempt to ride out the storm."

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