Traditional Christmas good cheer is lacking in the South East’s High Streets as sales fell for a seventh consecutive month and retailers see no respite in November, according to the CBI.

Malcolm Hyde, CBI South East Regional Director, said: “Shoppers face competing pressures on their wallets and are spooked by worries over job losses and the slowing economy.

“Retailers have had another tough month and, while there are some winners, the majority are suffering. The sector looks set to endure a very challenging run-up to Christmas.

“We are hoping the recent drop in interest rates will cut consumers and business some slack as it feeds through to the wider economy.”

Responding to the CBI’s Distributive Trades Survey, half of all retailers said that the volume of sales in the first half of October was down on last year, while only 23 per cent said they were up.

The resulting balance – where a balance is the difference between the percentage of retailers reporting an increase and those reporting a decrease – of -27 per cent matches September’s rate of decline and was in line with firms’ expectations. No improvement is anticipated in November, with a balance of 25 per cent expecting sales to fall.
The three-month moving average of sales volumes, which smoothes out monthly volatility, remained firmly negative with a balance of -33 per cent.

A balance of 35 per cent of firms said their volume of sales for the time of year was poor, and November’s outlook remains weak (-31%).

Suppliers continued to be hit by the knock-on effect of weak demand in the shops, as a balance of 36 per cent of retailers reported a year-on-year fall in the volume of orders placed upon suppliers.

However, the rate of decline has eased slightly over the past two surveys and is expected to do so again in November (-30%). A balance of 17 per cent of firms said stock levels are more than adequate to meet expected demand.

The majority of sub-sectors saw sales decline sharply compared to a year ago, although footwear & leather and hardware, china & DIY retailers reported an increase in sales. Grocers, including the major supermarkets, saw more modest sales growth.

Wholesalers found this month much tougher than September, and a balance of 32 per cent of firms said that sales volumes were down over the year to October. They predict the situation will worsen, and a balance of 43 per cent expects sales to fall in November.

Motor traders continued to experience difficult conditions. The balance of 87 per cent of firms reporting a fall in sales volumes was in line with expectations, and marks the fourth month of heavy declines. The weak demand hit sales of vehicles more than parts and accessories. The outlook for November is similarly weak, with sales set to fall at a significant pace again.