Shop sales fall again
RETAILERS have suffered another decline in sales in June as high street spending flagged for the second month in a row, according to the CBI. But the decline was slower than expected and firms are hopeful that spending will pick up in July thanks to a boost from the World Cup.
A net five per cent of retailers reported a rise rather than a fall in sales during the first two weeks of June. This was better than the net -15 per cent expected and an improvement on the May balance of -18 per cent, the CBI said. Sales are expected to recover slightly next month with a net 11 per cent of retailers forecasting volumes to be higher next month than they were in 2009.
Ian McCafferty, chief economic adviser to the CBI, said: “Footwear and leather goods retailers were the worst hit, but grocers and durable household goods enjoyed solid growth. This may reflect consumers gearing up for the World Cup by stocking up on food, drink and new televisions.”
He added: “Retailers are hopeful that sales will strengthen next month. As the survey pre-dates the emergency Budget, news that the feared rise in VAT will not take effect until next January may well also encourage some advance spending over the second half of the year.”
But with the Budget announcing other tax rises and spending cuts, the overall outlook for consumer spending still looks pretty weak, said Vicky Redwood, senior UK economist at Capital Economics, who added that incomes would be squeezed.