High street sales are continuing to grow, but retailers will need a late Christmas rush if hopes for a strong performance are to materialise, according to the CBI's latest Distributive Trades Survey.
38 per cent of retailers said year-on-year sales volumes rose in the first half of November, but 25 per cent said they were down. This 13 per cent balance is in line with the past six months, but much lower than the performance in the first half of the year, which peaked in April at 44 per cent. Retailers expect continued modest growth in December, with a balance of about 11 per cent.
The slowdown in sales volumes since the summer is an indication that shoppers are beginning to tighten their belts as the impact of five interest rate rises are felt.
Against this background, the desire by so many retailers to push up prices is a reflection of the rising cost pressures they face, said the survey. Overall, retailers expect the general business situation to remain the same over the next three months.
John Longworth, chairman of the CBI's distributive trades panel and executive director of Asda, said: “Although the economy is slowing – particularly in the housing market and associated retail sectors as the effect of five interest rate rises starts to bite – the impact of the price rises on inflation will be food for thought for the Bank's Monetary Policy Committee.”
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