Finance Matters

Posts Tagged ‘High Street’

According to the latest Confederation of British Industry (CBI) distributive trades survey, the volume of sales on the UK High Street were lower this month versus a year ago.

The figures suggest continue to be cautious about the economic outlook and rein in their spending on the back of rising unemployment, higher inflation and slow wage growth.

The CBI’s survey established that 24% of retailers saw sales volumes rise on an annual basis, while 39% reported a fall.

As a result, the balance fell to -15% – the lowest since May 2010.

The survey, which was conducted between 25 August and 14 September, discovered that most sub-sectors suffered with falls in department stores, clothing, footwear, furniture and carpets.

Commenting on the figures, Judith McKenna, chair of the CBI Distributive Trades Panel, said: “High street sales are sluggish but appear to be stabilising.

“However consumer confidence continues to be bruised by a combination of low wage growth, high prices and rising unemployment. Shoppers are still clamping down on discretionary spending and focused on buying the basics at the best price.”

Ms McKenna, who is also ASDA’s chief operating officer, added that consumers will continue to struggle with the winter utility bills hike and, as a result, retailers will face a challenging October.

The survey questioned more than 130 firms, of which 74 were retailers, 50 were wholesalers and 15 motor traders.

The figures tie-in with other reports about the High Street after accountancy firm BDO recently warned Britain’s retailers should prepare themselves for some tough times as pressure builds on consumers in the run-up to Christmas.

Several well-known retailers have recently reported falls in sales volumes with the John Lewis Partnership, which is regarded as a barometer of British retailing, recently reporting a marginal increase in sales but said trading conditions are “extremely challenging”.

The renowned employee-owned chain, which owns the Waitrose supermarket group, said sales rose 1% on a like-for-like basis in the six month period to 30 July.

However, across the group, first-half pre-tax profits slumped by 18% to £90.4 million.

Earlier this month, Home Retail Group announced a drop in sales at both its Argos and Homebase chains, while electrical goods chain Dixons Retail also posted a fall in sales.

Today meanwhile, Game Group, which sells computer and video games, consoles and accessories, said it made a pre-tax loss of £51.5 million in the six months to July 31, against a loss of £21.5 million in the same period a year earlier.

The company typically makes its profit in the latter half of the year when sales are boosted by the crucial Christmas trading period. However, it expects conditions to remain challenging for the remainder of the year.

Debenhams, which is Britain’s second largest department store after John Lewis, has today exceeded market expectations after reporting growth of 0.4% in the nine week period to the end of August on a like-for-like basis.

The retailing giant said aggressive summer discounting and promotions had helped increase its market share.

The company said growth came from its Danish subsidiary, Magasin du Nord, acquired two years ago, while the company has benefited from strong online sales throughout the year.

Chief executive Michael Sharp said helping to keep prices competitive had helped.

He said: “It’s not just about starting the sale early. Customers are liking what we are doing and our Designers at Debenhams ranges.

“There will be winners and losers and we think we are well positioned to be one of the winners.”

The news was well received by the market after shares in the company increased 3.5% in early trading today – outperforming the rest of the market.

In the meantime, the retailer said it has leased 145,000 sq ft at the Regent’s Place office, located near Regent’s Park, for 25 years, for its new headquarters.

The site is currently under development and completion is expected in the summer of 2013.

However, the figures come at a time when the British high street is struggling. Last week, the Office for National Statistics (ONS) revealed UK retail sales fell by 0.2% in August.

Households continue to be squeezed by higher inflation, rising unemployment and sluggish wage growth and this is affecting retailers.

Also last week, the John Lewis Partnership, which is regarded as a barometer of British retailing, reported a marginal increase in sales and said trading conditions are “extremely challenging”.

The renowned employee-owned chain, which owns the Waitrose supermarket chain, said sales rose 1% on a like-for-like basis in the six month period to 30 July.

However, across the group, first-half pre-tax profits slumped by 18% to £90.4 million.

There is further evidence of a cutback in consumer spending today after electrical goods group Dixons Retail posted a drop in sales. The group, which is Europe’s no.2 electricals retailer, said like-for-like sales were 7% lower in the three months to 23 July compared with a year ago, which included a 10% fall in the [...]

The British Retail Consortium (BRC) has today reported weak retail sales for August. According to the BRC, like-for-like sales (which exclude the impact of sales at new stores) fell 0.6% last month on an annual basis. Overall sales rose 1.5%, however, this was much lower than the 2.8% rise noted in August 2010. Commenting, Stephen [...]

UK retail sales volumes fell in August, at the fastest pace for over a year, the Confederation of British Industry (CBI) reports. In a new quarterly survey, 46% of retailers said they had experienced falling sales in the two weeks to mid-August (compared with a year earlier) and the level of negativity registered over prospects [...]