Retail sales plummet at fastest rate since 2008, according to latest survey

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22nd August 2019 16:32 - Retail

Retail sales plummet at fastest rate since 2008: The Confederation of British Industry’s (CBI) latest survey of the retail sector has found that British retail sales have fallen at the sharpest pace in more than a decade.

The survey also revealed that optimism for the industry is at its lowest level since the financial crash of 2008. 

Only one in ten of the companies polled said that sale volumes in August 2019 are at a higher level than they were 12 months ago, with almost six in ten (58%) confirming they were lower. The results reveal a net balance of -49% in August, down from -16 in July.  The CBI figures show this is the most dire reading since 2008 and the second weakest since records began in1983.  

The survey revealed that in response to increasing uncertainty around Brexit and the possibility of another recession, retailers are cutting back on new orders.  It also found that retailers expect sales volumes to fall in September, although at a lesser rate (-10%) with almost a quarter (24%) predicting a fall. Just 14% of retailers questioned said they expected to see a rise. 

When looking at sales averages for this time of year, the CBI survey revealed they were marginally below average, but not down as much as they were last month. The majority of retailers said sales were average (54%), a fifth (21%) said they were poor and just 15% reported they were 'good' - a rounded balance of -6%. 

The number of orders placed with suppliers this month fell at the fastest rate since December 2008, with more than two-thirds (67%) confirming a fall and just 10%, an increase. This equates to a balance of -57%.

The latest CBI survey predicts orders will fall at a rate of -29% in September. 

Asking respondents about their expectations for the coming months, just 2% said they expected to see an improvement in their retail company's business situation, with 27% saying they think the situation will worsen further. This gives a rounded balance of -25%. And when it comes to investments over the coming year, 35% of retailers they expect to invest less compared to the past 12 months, while 16% are looking to up their investment. 

Chief economic adviser to the EY ITEM Club consultancy, Howard Archer, said: “The very weak August CBI survey raises the possibility that consumers are becoming more concerned and cautious as the UK’s Oct. 31 departure date from the EU looms and expectations of a ‘no deal’ Brexit rise.” 

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