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Last Updated: Wednesday, 29 June, 2005, 11:58 GMT 12:58 UK
UK retail sales fall accelerates
High Street sale sign
Many stores have introduced sales earlier this summer
UK retail sales recorded their biggest year-on-year fall in 22 years during June, according to a CBI report.

About 23% of retailers saw a year-on-year rise in sales, but 42% said sales were down, the monthly distributive trades survey found.

This gives a balance figure of -19, compared with May's figure of -7 and April's figure of -14.

The CBI said consumers had "tightened their belts" in the wake of a series of Bank of England interest rate rises.

Football effect

The CBI said that sales appeared weak when contrasted with strong sales in June last year, when retailers benefited from a spending spree related to the Euro 2004 international football championships.

With the slowdown in the housing market and a rise in energy bills it is not surprising retailers are suffering, although some more than others
John Longworth, CBI

"A year ago retailers were reaping the benefits of Euro 2004, which was credited with boosting sales of everything from football clothing to TVs and beer," said John Longworth, chair of the CBI's distributive trades panel.

"But while this may explain part of the record year-on-year decline now registered, there is no doubt that the underlying picture is also bad."

He said the Bank of England's five interest rate rises since November 2003 had initially been "slow to take effect" but that shoppers had cut back on spending since the start of the year.

Food sales up

Many stores had started their summer sales earlier this year in an effort to stimulate sales, Mr Longworth said.

"With the slowdown in the housing market and a rise in energy bills it is not surprising retailers are suffering, although some more than others," he added.

Firms selling furniture and carpets, hardware, china and DIY products were all hard hit as a result of the sluggish housing market.

Footwear and leather sales also fell sharply, and clothing sales remained weak.

However, grocery sales volumes "continued to increase strongly" while specialist food stores were the only other sector to report an increase in sales.




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