February Doesn’t Bring Needed Boost To High Street

The result from the CBI’s latest Distributive Trades Survey revealed that 36% of respondents believed year-on-year sales volumes were down. Whilst only 33% thought they were up. This was the first negative balance since November 2006.

But, despite belt-tightening among increasingly cautious consumers and flat retail sales, the prices of goods in the year to February increased at their fastest rate in over a decade, as many retailers felt the pressures of rising energy, food and raw material costs.

Fifty-five percent of respondents said that average selling prices were up on a year ago, while only six percent said they were down, giving a rounded balance of +50%. This was the strongest since August 1996 and a similar rate of price increase is expected next month.

Ian McCafferty, CBI chief economic adviser, says, “The high street has been slowing gradually since last April and sales earlier this month were very subdued, while prices have risen strongly. Reflecting the increasingly tough conditions faced by the sector, business sentiment and investment plans have both taken a hit.”