Retailers have been cutting jobs over the 12 months to February at the fastest rate since since 1992, reflecting the fierce pressure sales and prices are now under in this sector.
Retail sales in February were further below the average for the time of year than at any time for six years and in the year to February sales barely grew at all.
Those are the main findings of the CBI’s latest quarterly Distributive Trades Survey published on Tuesday.
Fifteen per cent of retailers said they were employing more people than a year ago but 33 per cent said employment was down. The balance of minus 18 per cent is the lowest since November 1992. Retailers expect employment to remain below the level of a year ago in March, but by less than in February.
Asked about the volume of sales for the time of year, 14 per cent of retailers said they were good while 36 per cent said they were poor. That gives a balance of minus 23 per cent (allowing for rounding) which is the lowest since January 1999.
Year-on-year sales grew very slightly. The balance of plus two per cent is a modest improvement on the fall in sales indicated by January's balance of minus three per cent, but contrasts with an average balance of plus 24 per cent over 2004.
For the second successive quarter more retailers said prices were down on a year ago than said they were up and prices are expected to go on falling next month.
But there are reasons for optimism. A balance of plus 14 per cent suggests stronger sales growth is expected in March while the three month rolling average, which smooths out month to month blips, shows sales continuing to grow, and by more than expected.
A balance of plus 11 per cent for February compares with the plus 8 per cent that had been expected. The three month average is expected to show similar growth in March. These figures indicate retailers believe sales will be better in the immediate future than in the year so far but they are still well down on the rates of growth seen through spring and summer last year.
CBI chief economic adviser Ian McCafferty said: "Weak consumer demand for goods means, so far this year, retailers have suffered minimal sales growth and falling prices. The retail environment has been particularly tough for sellers of big ticket items.
“It may be that high levels of personal debt, coupled with stagnant house prices, mean interest rate hikes have a bigger and quicker effect now than was the case in the 1970s 80s and 90s. Consumers are also concerned about rising fuel prices and council taxes. But retailers expect a return to modest sales growth in the immediate future, suggesting they believe consumer confidence will hold up."
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