Weak high street sales spark fear of business failures

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The Independent Online

Retail sales remained below average in September for the second month running and there are fears that a further reduction in consumer spending will lead to an increase in business failures between now and Christmas.

Retail sales remained below average in September for the second month running and there are fears that a further reduction in consumer spending will lead to an increase in business failures between now and Christmas.

The CBI yesterday reported a slight pick up on the high street last month following a poor performance in August but it cautioned that underlying sales growth remained weak.

Meanwhile, the business information group D&B said that bankruptcies had increased by 7 per cent in the first nine months of the year and warned that the failure rate might well rise in the next few months.

According to the CBI's distributive trades survey, a balance of 18 per cent of retailers saw sales increase in September compared with a balance of only 5 per cent in August.

The improvement was driven by the launch of new autumn/winter product ranges and strong sales growth in sectors linked to the housing market such as furniture, carpets and durable goods.

However, Alistair Eperon, the chairman of the survey panel, said many retailers were still experiencing an underlying downturn, pointing out that sales growth was well below the levels seen in the first four months of the year. "Consumers are either being careful with their money or they have less to spend," he added.

The biggest increase in business failures was in the West Midlands where the number of companies going bust rose by 16 per cent. The South-west and South-east also recorded increases of more than 10 per cent.

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