Retailers on the UK high street are not confident about growing sales over the next quarter after trading levels were below expectations at the beginning of February.
The Confederation of British Industry’s (CBI) latest Distributive Trades Survey shows that while 36 per cent of retailers experienced an increase in sales volumes in the two weeks to February 16th, almost as many saw a decline.
CBI said the resulting balance of +six per cent represented the slowest pace of year-on-year growth in eight months.
Retailers questioned for the survey predict next month’s sales to be at the same level as a year ago, although a greater number of high street businesses anticipate annual comparisons to get worse over the next three months, rather than improve.
The study also indicates that sales volume trends were weaker across almost all retail sectors at the start of February, with durable household goods and hardware & DIY performing particularly poorly compared to last year.
As predicted last month, retailers are beginning to see the true health of their industry following the January sales period, which makes analysis of the sector’s strength difficult.
Lai Wah Co, CBI’s Head of Economic Analysis, said: “The positive effect of seasonal discounting on the high street that previously boosted sales has now waned. Retail sales are likely to be more challenging over the coming months.
“At the same time prices are set to rise considerably as the VAT increase and the soaring cost of raw materials are passed on to shoppers.”