The UK high street endured another month of falling sales and expects the hard times to continue in October, while supermarkets enjoyed solid sales growth, according to the UK’s leading business organisation CBI.

In response to the company’s latest Distributive Trades Survey, 21 per cent of retailers said that the volume of sales in the first half of September was up on last year, while 48 per cent said they were down.

The resulting balance of -27 per cent marks a third consecutive month of sharply contracting sales, but is better than firms had feared (-42 per cent), and is an improvement on the survey record low in August of -46 per cent. Nevertheless, the outlook for October remains very weak at -30 per cent.

A balance of 46 per cent of firms said their volume of sales for the time of year was poor, and 44 per cent expect a tough October.

Slow demand on the high street has had a knock-on effect on the volume of orders made with suppliers. A balance of 39 per cent of retailers reported a year-on-year fall in order volumes, which is a slight improvement on August. Stock levels were described as more than adequate to meet expected demand by a net 20 per cent of firms.

Looking at individual sectors, the supermarkets continued to weather the economic slowdown, and a balance of 37 per cent of grocers reported sales growth. All the other sectors saw a fall in sales compared to a year ago, especially those linked to the housing market.

The Distributive Trades Survey (DTS) covers 20,000 outlets of firms responsible for 40 per cent of employment in retailing.

Andy Clarke, chairman of the CBI Distributive Trades Panel, and retail director of Asda, said: “Shoppers are increasingly focusing on price as the economy continues to slow and household budgets get tighter. There has been a marked migration to the value end of the market, and many have cut back on luxuries, although the drop in petrol prices should give a bit more breathing space.

“Retailers of big ticket items like furniture and white goods, who are closely tied to the ailing housing market, continue to suffer. Supermarkets have fared much better in these difficult times, particularly those that have realigned their range to match the price conscious.”

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