Sales volumes fall in February, says CBI's trades survey

Sales volumes fall in February, says CBI's trades survey

	Published : Wed, 01 Mar 2006 20:00 By : James Rowe Print this Story

LONDON: Retail sales volumes fell in February, continuing the trend in January, according to the Confederation of British Industry's distributive trades survey. As much as 40 per cent of the 192 companies that responded to the survey said sales were lower on a year ago, while 22 per cent felt the volumes rose.

The CBI said this gave a balance of -18 compared with -11 in January and much below the retailers' own forecasts of last month of +1.

The retailers are predicting that the sales would fall next month, but at a slower pace, with the balance at -5.

CBI's chairman of survey panel and executive director of Asda John Longworth said it is no surprise that consumers remain cautious about spending money as household bills for energy, water and council tax are rapidly increasing.

Another report, by GfK NOP, indicated that consumer confidence has deteriorated in February though at a rate less than expected. The firm said its consumer confidence balance fell to -4 from -3 in January.

Analysts feel these indicators are not likely to influence the Bank of England in deciding a cut in the borrowing rates.

The CBI's findings showed that the three-month underlying rate of sales has improved slightly to give a balance of -10 from -15 in January. Its quarterly survey of retailers assessing the stores' sentiment about the business potential found that it has shot up to -2 in February -- its highest levels since May 2005. The balance was -26 in November.

The employment balance in the retail sector fell to -26 in February from -15 in the November survey, which is the lowest in the survey's 22-year history.

The CBI had conducted the survey between 31 January and 15 February.

Longworth said competition in the high street remains tough as stores continue to tempt shoppers with discounts and other promotional offers. "But confidence about the overall retail outlook has recovered since November’s low and some retailers now expect a slight improvement in sales over the coming month,” he added.