BBC News | BUSINESS | Shops: Prices down, sales up

BBC News Online: Business

Wednesday, 1 March, 2000, 16:56 GMT

Shops: Prices down, sales up

High Street sales soared in the UK during February, according the Confederation of British Industry (CBI).

But the CBI's quarterly distributive trades survey also reported - in line with other surveys - that prices have fallen.

In the three weeks from 2 February, 61% of retailers said sales were up on a year earlier, while 14% reported a drop - giving an overall positive balance of 47%.

The figures compare with a positive balance of 29% recorded in January and 41% in December, and were above average for the time of year.

On a three-monthly basis, average sales volumes were up 39% from 31% in January and 27% in November.

Retailers are also feeling much more confident about future prospects with 31% expecting business to improve over the next six months, while only 3% were predicting a fall.

This positive balance of 28% compares with one of 6% a year ago and 19% in November.

Confectioners disappoint

Nearly a third of retailers said they had cut prices.

Alastair Eperon, chairman of the panel producing the survey said: "Unlike the 1980s, growth is being won in fiercely competitive markets with prices being cut and margins under pressure, while the pound continues to bite.

"Moreover, with growth set to cool in March and prices expected to dip further, the clear message is that interest rates can be kept safely on hold."

Inflation in the UK remains well below the target rate of 2.5%. The Bank of England's Monetary Policy Committee meets next week to decide whether to keep its base lending rate at 6%.

The brightest performing sectors, compared to a year ago, were grocers, furniture and carpet retailers, and chemists.

Confectioners saw a sharp fall in sales volumes.

Related to this story:
Huge surge in retail sales (17 Feb 00 | Business)
UK high street prices fall (07 Jan 00 | Business)
Shop sales pick up (09 Nov 99 | The Economy)
Christmas shops in search of sparkle (13 Jan 00 | Business)

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