Further decline for UK retail sales

Retail sales in Britiain fell for the sixth time in a row this month but improved on August, a Confederation of British Industry (CBI) survey said today.

The business group's distributive trades survey showed a balance of 27% of British firms reporting weaker sales volumes than a year ago.

It was better than the 42% expected, and a marked improvement on August's 46% reading - the worst in the survey's 25-year history.

Supermarkets looked to be weathering the downturn, with a balance of 37% of grocers reporting sales growth.

But sectors linked to the ailing housing market continued to suffer, with 62% of furniture retailers reporting worse sales, and 84% of household goods suppliers.

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."

The CBI sales data contrasts with official sales figures from the Office for National Statistics, which showed a 1.2% rise between July and August.

In another sign of sluggish activity, stock levels were described as more than adequate to meet expected demand by a net 20% of firms. The trading outlook was also grim, with 30% of retailers expecting sales to worsen again in October.

Andy Clarke, the chairman of the CBI Distributive Trades Panel and retail director of Asda, said the supermarket sector reported a "marked" shift to the value end of the market.

He said: "Shoppers are increasingly focusing on price as the economy continues to slow and household budgets get tighter.

"Supermarkets have fared much better in these difficult times, particularly those that have realigned their range to match the price conscious."

This is consistent with recent retail data that has shown discounters like Aldi and Lidl making inroads into the grocery market.

The CBI data also showed that clothing and footwear shops were faring badly, with 27% and 79% respectively.

Howard Archer, UK economist at Global Insight, said: "While the CBI's September distributive trades survey shows improvement compared to August, it is nevertheless a weak report that does little to dilute belief that consumers are now reining in their spending significantly.

"Consumers are clearly reluctant to make major big-ticket purchases, while the marked housing market slowdown is clearly also having a major dampening impact on sales in these sectors."

The CBI survey was conducted between August 28 and September 17, with 149 firms taking part.