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Retailers struggle in summer but sales falls not as bad as expected

Published: 29 July 2009
CBI Distributive Trades Survey reveals that DIY, hardware and furniture retailers are among those affected as sales drop for the third month running.
Retailers struggle in summer but sales falls not as bad as expected
The UK high street is having a difficult time this summer as retail sales are revealed to have fallen for the third consecutive month in the year to July.

The forecast for August also looks weak, according to the Confederation of British Industry (CBI). However, its latest Distributive Trades Survey showed that the latest drop in sales was not as severe as the heavy falls seen between July 2008 and March 2009.

Falling sales were reported by retailers of hardware, china, DIY and furniture and carpets. Sales continued to fall in the durable household goods sector, although dropping at "a slower rate than the very heavy falls seen in the past year", said the CBI.

The grocers continued to experience strong growth on a year ago and footwear and leather also saw its strongest results since August 2007.

The Distributive Trades Survey found that, when asked about year-on-year sales volumes in the 12 months to July 2009, 32% of respondents said that volumes had increased, while 47% reported a drop. The resulting balance of -15% was better than the CBI's expectations of -21%, although a slightly heavier fall of -23% is predicted in August.

CBI Distributive Trades Panel chairman and chief operating officer of Asda Andy Clarke said: "Many retailers are having a difficult summer and no pick-up is expected in August. But the overall sales falls are not as heavy as we saw at the start of the year and some retail sectors are reporting growth."

He added that the recent rise in unemployment is also likely to affect spending in the months ahead.

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