Recession looms as further pain hits UK and Europe
Hugo Duncan, Evening Standard24 Sep 2008
The UK High Street has endured another torrid month as Britain and the eurozone plummet towards recession.
The CBI today said retail sales fell for a sixth month in a row this September although there was a slight improvement on the devastation felt in August.
It came as business confidence crashed in the eurozone's three largest economies — Germany, France and Italy — leaving the region on the brink of recession.
Economists said the weak CBI survey highlighted the slump in the British economy while Royal Bank of Scotland analysts published a note on Europe titled "Full-blown recession looming in 2009 in the euro area".
The CBI found 21% of retailers enjoyed rising sales this month while 48% said they were down.
The balance of minus 27% was the third-weakest in the survey's 25-year history but better than the record low of minus 46% last month.
Shoppers worried about their jobs, falling house prices and rising bills stayed away from the High Street.
Worst-hit were sectors linked to the ailing housing market such as furniture stores and household goods suppliers, while supermarkets benefiting from food price inflation looked to be weathering the storm.
CBI deputy director general John Cridland said: "Sadly, there has been no Indian summer after the sales washout of August, and the retail outlook for early autumn remains bleak."
John Lewis, Argos, Next and Laura Ashley have been among the major stores reporting tumbling sales, and retailers are braced for a shocking Christmas.
Paul Dales of Capital Economics said: "Conditions on the High Street remain very weak. They are going to get worse before they get better."
Allan Monks of JPMorgan Chase was more upbeat, saying that although the survey was "still very weak", the improvement on August "offers some hope that the slide in spending through the summer has found a bottom".
Business confidence sank in Germany, France and Italy as the global financial crisis claimed the scalp of Lehman and left other institutions reeling.
Reader views (3)
I have to admit that there is a certain enjoyment at the moment in being a pensioner whose pensions are all paid by Her Majesty!
- David Chown, bordeaux france, 25/09/2008 06:36
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The last 5 years or so have seen significant growth of employment in Government and retail. Looks like retail employment is set reverse that trend, sending unemployment sky rocketing as firm try to cut costs or just go to the wall.
Every boom is followed by a bust, and always will be.
- Dave Davies, Basingstoke, Hants, 24/09/2008 16:58
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The one saving grace for most retailers is that their online and direct catalogue operations are still holding their own. if you think that the retail clinate is bad in London you want to see how it is in small coastal towns. A lousy summer saw tourism take a pounding leavig many independent retailers here minus the usual summer upsurge in trade. It is going to get tougher for all thoe wholly dependent on High Street retail .... an we're a large influx of visitor registrations for our catalogue & home shopping tradeshow next week - (ECMOD at Earls Court 1-2 Oct)from traditional retail businesses - all keen to find out how they can offset High Street losses by focusing more efforts on driving online sales. Entrance to the show is free, by the way, as are some excellent seminars being presented by exhibiting companies ....
- Jane Revell-Higgins, Ilfracombe, North Devon, 24/09/2008 14:45
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