High Street in a sweat over summer sales |
|
|
Published
:
Tue, 30 Aug 2005 11:10
|
LONDON: The gloom on High Street does not seem likely to lift this summer. At least 20 percent retailers expect business to worsen during the next three months while only 13 percent believe the trend will reverse. According to the Confederation of British Industry (CBI), the declining retail sales volumes in August have dragged the underlying annual sales trend to its lowest in 22 years.
In an attempt to increase footfall many stores had brought forward summer sales with huge discounts. Stores such as Asda have lined up a new round of price cuts and promotions to lure back the consumers into their stores. Additionally, the Bank of England had announced a rate cut hoping to revive consumer interest. However, neither effort seemed to have made any significant impact on the downturn.
The CBI’s survey showed that 27 percent of retailers showed a rise in sales volumes in August. In contrast, at least 45 percent reported a fall in sales volumes. Many are pessimistic about the coming months. The CBI said August 2005 was the first month in seven years that the mood on High Street was more negative than positive.
Undeniably, High Street is set to sweat out the summer.
Other factors also contributed to the declining sales volumes. The sluggishness in the housing market prompted certain sections of the retail industry to slash prices in a vain effort to maintain volumes. Furniture chains and DIY stores are among those that resorted to huge price cuts.
The interest rate cut announced by the bank of England from 4.75 percent to 4.5 percent may take a while to show its effect on retail sales, according to CBI. Their August survey found that prices in 38 percent of stores were lower than a year ago. On an annual basis, the survey also found that 35 percent retailers hired fewer employees while 26 percent of stores said they did not take on new employees.
Another development that has added to the pressure on retailers is the European Union’s capping of textile imports from China. Stocks have been piling up in warehouses as many retailers cannot take delivery.
The CBI’s survey was conducted from 2 to 7 August and covered 202 stores.
|
|
|
|
|
|
Print this Story
