High Street sales boom 'is over'

Jane Padgham12 April 2012

PLUNGING stock markets and fears of a house-price collapse have left growth in High Street sales at its slowest rate for 18 months. In the latest sign that the consumer boom is over, the CBI said retailers' expectations of a July sales recovery from June's subdued levels have not been realised.

A net 16% of retailers reported higher sales than a year ago, the same balance as last month, which was the lowest since December 2000. Retailers' expectations have not been met in three successive surveys and firms are now less optimistic of a recovery than last month.

Alastair Eperon, chairman of the survey's panel and a director of Boots, said: 'The retail sales boom seems to be over. Despite continuing price cuts and stiff competition on the High Street, consumers are less willing to spend.'

Eperon said that, with increasing signs the global economic recovery is fragile, the Bank of England can safely leave interest rates on hold. 'Firms need stability in order to make the recovery a reality,' he added.

The Bank's monetary policy committee kicked off its two-day rate-setting meeting today. The CBI survey reinforced expectations the cost of borrowing will be kept at 4% for the ninth month in a row.

Sales growth weakened for grocers and for retailers selling footwear, confectionery, tobacco and newspapers, according to the CBI. Booksellers and stationers reported the sharpest drop in sales. However, retailers selling durable household goods continued to perform well.

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