A recent survey conducted by CBI shows that retailers are not optimistic for the near future as prices have actually fallen at a faster rate than they have in more than a year. Consumers are cutting back as the economy is struggling and millions are quickly becoming redundant.
In the survey, CBI’s distributive trades survey, sales were reported to be down -14 in August which is a change from -5 last month. Unfortunately, this is well below the -10 that had been predicted by economists. Part of the problem is attributed to wages which aren’t growing, a very weak economy, inflation and of course more and more people becoming unemployed. Even those with jobs are worried about the future and have cut spending accordingly.
It is now predicted that prices will not rise quickly and retailers with good business sense will make it their business to offer the best prices possible in order to hold onto business during this low point in the economy. According to Judith McKenna of CBI, consumer morale is at record lows which is keeping them from spending as they fear for the future.
Part of the current concern which is also weighing heavily on UK consumers is the debt crisis in the Eurozone and in Northern Ireland. Unless something can be done to improve conditions in those sectors, there is fear that the spill over will further affect the UK economy, and not for the better.
Economists are projecting slower than normal consumption to further impact an already weak economy. As well, the financial market is facing more turmoil and a further reduction in integral export markets. All this taken together does not bode well for a speedy recovery in retail sales.
