Retailers shed jobs as high street sales continue to fall – CBI
- Published on Monday, 28 November 2011 11:56
- Posted by Scott Buckler
High street sales volumes fell on a year ago in November, for the sixth consecutive month, with retailers expecting another decline in December, according to the CBI. Meanwhile, retailers are reducing their headcount at the fastest rate in two years
The CBI's latest quarterly Distributive Trades Survey revealed that 26% of retailers saw the volume of sales rise in the year to November, while 44% said they fell. The resulting rounded balance of -19% was weaker than expected (a balance of +4%), and represents the fastest decline in sales since March 2009 (-44%).
Sales volumes were considered below average for the time of year, with a balance of -39%, the weakest figure since March 2009 (-42%). That was slightly weaker than October's balance of -34%. The decline in sales volumes was driven by pressure on grocers (-21%), specialist food & drink stores (-51%), department stores (-49%) and clothing (-27%).
The volume of orders placed with suppliers fell in November (-25%), at the fastest rate since March 2009 (-47%). Orders are set to continue falling next month -18%).
Employment across the sector fell at the fastest rate since November 2009 (-27%) in the year to November. The survey showed that 13% of retailers increased their headcount, while 40% reduced numbers, giving a balance of -27%.
Looking ahead to December, retailers expect the pace of decline in sales to ease somewhat (-6%).
Ian McCafferty, CBI Chief Economic Adviser, said:
"Retailers remain hard-pressed, even as we get closer to Christmas.
"The relatively mild weather this autumn has hit clothing stores particularly hard, and retail sales are down year-on-year for the sixth month in a row.
"Retailers may be hoping that shoppers will loosen their purse strings in the run up to Christmas, but consumers are likely to remain cautious about spending given the uncertain economic outlook."
Price inflation on the high street remained well above average, with a balance of +56% of firms saying average selling prices rose in November, and it is expected to stay at similar levels in December (+54%).
Retailers are scaling back investment plans over the next 12 months (-4%), though to a lesser extent than in August (-16%).
A net balance of 8% of retailers said they feel more negative about the business situation over the next three months than they did three months ago.
Looking at wholesalers, sales volumes growth turned negative in November (-13%) and they expect sales volumes to decline at the same rate next month. The three-month moving average, which smoothes out volatility, was flat (+3%) and is expected to remain so next month (-1%). Average selling prices rose rapidly on a year ago (+48%).
In motor trades, the volume of sales declined steeply (-45%) albeit at a slower pace than October (-55%). Sales volumes are expected to continue falling at a faster rate next month (-52%).