Retailers are planning to axe jobs and cut investment over the coming months after slump in spending by consumers, states a recent report citing latest snapshot of high street and online activity.
Confederation of Business Industry (CBI) has said its barometer of retail activity had fallen for a fourth month in a row in August to stand at its lowest level since March 2021.
Martin Sartorius, a principal economist at the CBI, said, “Retail sales in August fell at their quickest pace in over two years, culminating a summer that many retailers would rather forget.
“Against a backdrop of rising interest rates and weak demand, retailers foresee cuts to investment over the next year, while employment is expected to fall again next month.”
The employers’ organisation said retailers saw no letup in the poor trading conditions over the coming months and were cutting back on orders with suppliers.
The survey asked retailers whether sales volumes were up, down or unchanged on a year ago and found the balance of those recording an improvement in business compared with those registering a decline stood at -44 percentage points in August. This was weaker than the -25 point shortfall recorded in July and well down on the +5 point balance seen in April.
While a recent survey from the British Retail Consortium lobby group found retailers offering deep discounts to woo reluctant consumers, the CBI said there was only tentative evidence of prices coming down.
Retailers are asked every three months whether prices are rising or falling and in August a balance of +73 percentage points said they had risen. That was slightly down on the +77 point balance recorded in May and the +80 points registered in February.
The CBI data echoed industry data earlier this week that showed sales growth at British supermarkets slowed in August, reflecting lower inflation as well as a hit to demand from unsettled, unseasonably wet weather.
Market researcher NIQ said supermarket sales on a value basis grew 7.2 per cent in the four weeks to Aug. 12 – the lowest growth since January and down from 8.9 per cent in its July data set.