View from City Road: Optimism with reservations
Tuesday 20 July 1993
But do not get carried away with enthusiasm. The survey also casts doubt on the strength of recovery in the next few months since it shows retailers may have made a serious planning error. They have heavily overstocked their shelves and will probably cut back their orders from manufacturers.
By a majority of more than two to one retailers told the CBI that trade was more buoyant in June than a year earlier - the most upbeat response since April 1990. Similarly, there has been a sharp improvement in the number of retailers reporting good trade for the time of year.
Economists at Midland Global Markets have studied the past relationship between the CBI survey and the Central Statistical Office's sales data, and derived rules of thumb to predict the official figures.
These suggest that the volume of high street spending rose by more than 1 per cent between May and June after adjusting for normal seasonal patterns, which would put it back on a firmly rising trend.
A rise in spending should come as no surprise following last week's inflation figures. These showed the biggest June falls in clothes and household goods prices since the 1950s - clear evidence that the summer sales have started early.
Unfortunately, this appears to have been the result of retailers' earlier over-confidence. Since March, they have consistently overestimated their sales and dramatically increased orders from suppliers.
But the goods have stayed on the shelves. Unwanted stocks have risen to a 14-month high and orders are now being scaled back. Although the price cuts appear to have revived spending from the doldrums of the past few months, retailers still expect to be saddled with much larger stocks than they want.
This over-optimism helps to explain why factory output has surged as domestic demand has remained subdued, while many of Britain's export markets have slipped deeper into recession. Retailers are now facing reality, and manufacturers may soon have to do so as well.
Revealed: Devastating impact of 'bedroom tax' sees huge leap in demand for emergency hardship handouts for tenants
Notes from a small island: Is Sealand an independent 'micronation' or an illegal fortress?
You thought Ryanair's attendants had it bad? Wait 'til you hear about their pilots
Revealed: Eerie new images show forgotten French apartment that was abandoned at the outbreak of World War II and left untouched for 70 years
Five-year-old British girl who died in a pool at Coral Sea Waterworld Hotel in Egypt's Sharm el-Sheikh resort named as Chloe Johnson
- 1 Stoke City investigate 'religious abuse' after 'pig's head is found in Kenwyne Jones' locker'
- 2 Gove’s lesson: spare the comma, spoil the child
- 3 Heading for America? Prepare for the longest US immigration queues ever
- 4 Grace Dent on TV: Extreme Couponing, My Strange Addiction, and Here Comes Honey Boo Boo, TLC
- 5 Join Ryanair! See the world! But we'll only pay you for nine months a year
BMF is the UK’s biggest and best loved outdoor fitness classes
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Win anything from gadgets to five-star holidays on our competitions and offers page.
iJobs Money & Business
£550 - £600 per day: Orgtel: Fidessa Analyst / PM - Banking - London - Up to £...
£450 - £500 per day: Orgtel: Sourcing Manager - Banking - London - Up to £500p...
To be discussed at interview.: Queen Elizabeth's School: An experienced and ef...
£294.05 - £330.92 per day + 150 per day travel and accommodation: Orgtel: A le...