No relief in sight for gloomy retailers

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The scale of the problems facing retailers was laid bare by gloomy sales data from the Confederation of British Industry yesterday, as stores said they expect next month to be equally grim.

Sixty-three per cent of retailers suffered falling sales in the first half of March, the CBI's Distributive Trades Survey found, while just 19 per cent reported an uplift. The net balance of declining sales at 44 per cent of retailers was worse than the negative 33 per cent forecast.

The March figure also represents an ominous return to the grisly sales in the three months prior to February, when a balance of just 25 per cent of store groups revealed declining sales.

Andy Clarke, the chairman of the CBI's Distributive Trades Panel and chief operating officer at Asda, was understandably downbeat. "With unemployment rising and household income struggling, the high street faces testing times ahead," he said. "The recession continues to force consumers to re-examine every item of spending."

Restructuring firms expect a fresh wave of administrations over the coming months, as retailers buckle under the strain of hefty debts, falling profits and rising taxes. Yesterday, retailers were due to pay second-quarter rental bills amounting to hundreds of millions of pounds.

British retailers expect the brutal trading conditions to continue in April, with a net balance of 42 per cent expecting sales to fall.

Grocery was the only sector where a net balance of retailers said sales grew rather than fell during the first half of March. The picture was particularly gloomy for those selling durable household goods, with a whopping 90 per cent posting falling sales, but trade was little better for clothing, footwear and leather outlets, and pharmacies and booksellers.