Retailers hit by falling sales

The High Street is suffering after a report revealed that clothing stores experienced their worst month for 25 years.

A survey of retailers by the CBI showed 39% were hit by dwindling sales this month while only 30% said they had improved.

The balance of minus 9% was better than May’s reading of minus 14% but still a long way off the long-term average of plus 18%.

The strongest performers were supermarkets as shoppers spent more on necessities rather than luxury goods.

According to Howard Archer of Global Insight, the outlook for consumer spending over the next few months is pretty grim.

It is widely believed that the Bank of England will increase interest rates in a bid to manage runaway inflation after it rose to 3.3% in May.

In related news, a report earlier this month from the Office for National Statistics revealed that unemployment in the UK increased by 38,000 to 1.64 million in the 3 months to April.

According to the Institute for Employment Studies (IES), the highest number of job losses have been experienced in the financial and construction sectors.

However, it is believed that the retail sector could be facing challenging times after recent industry figures showed that consumer confidence in the UK had fallen to record lows.

Nigel Meager of the IES said that retail workers may be the next to join the dole queue.

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