Retail sales volume marginally up, firms optimistic about future |
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Thu, 03 Mar 2005 01:00
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The Confederation of British Industry (CBI) in its latest survey said that the overall retail sales increased by a slight margin, surpassing the expectations, but shopkeepers were upbeat that the business will improve in the next couple of months. But despite optimism, the Bank of England has identified the slowdown in the consumer sector as a major economic risk.
The survey – which was conducted between Jan. 31 and Feb. 16 – stated that 30 per cent of the retail firms reported higher sales compared to same period last year, while 28 per cent of them said it was below normal, thereby leaving the retail sales balance slightly up for the month of Feb. at +2, compared to -3 in Jan. Also, the sales balance for the year fell to -23 from -8; the lowest since Jan. 1999.
| CBI said, despite poor showdown, the 33 per cent of firms reported sales will be up in the coming months, starting March, while 19 per cent said the sales will be down, leaving the retail sales balance at +14.
Ian McCafferty chief economic adviser to the CBI said: “Retailers expect a return to modest sales growth in the immediate future, suggesting they believe consumer confidence will hold up.”
He said the retail environment had been particularly tough for retailers selling big-ticket items, especially banks. “It may be that high levels of personal debt, coupled with stagnant house prices, mean that interest rate hikes have a bigger and quicker effect now than was the case in the ‘70s, ‘80s and ‘90s,” said McCafferty.
In its survey, CBI also said that business sentiment improved slightly from zero in Nov. to +8. But faster rate of job cuts by retailers since Nov. 1992 has left the employment balance at -18 from -9 in Nov.
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