High street sales subdued

Spending in Britain's high streets was subdued this month as the weakness in the property market took its toll on big-ticket goods for the home, the CBI said today.

The monthly snapshot of retailing from the employers' organisation found that almost the same number of shops and stores (36%) said business was brisker than a year earlier as it reported an annual decline (35%).

The balance of +1 percentage points was slightly better than retailers had been braced for in light of tougher borrowing conditions caused by the credit crunch, but the CBI said there had been a marked slowdown in the growth of high street activity in recent months.

Data from the CBI's distributive trades survey showed that the three-month moving average, seen as more reliable than the findings from a single month, continued its gradual fall from its peak of +36 points last May to +1 point this month.

Ian McCafferty, CBI chief economic adviser, said: "This month's survey has borne out retailers' expectations that the strong growth enjoyed in 2007 has come to an end.

"The picture now is of subdued activity as consumers tighten their belts amid the general cooling of activity we are seeing across the whole economy."

McCafferty added: "One area which saw good growth was the food sector - perhaps because people are preferring to treat themselves at home instead of eating out. However sales of bigger items, especially white goods, continued to fall, as the slowdown.....continued below

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in the housing market and tightening of credit takes hold."

Durable household goods saw the fifth consecutive month of shrinking annual sales (a balance of -77 points). Despite bright spots - food, booksellers, and leatherwear and shoes, retailers said business for the time of year was disappointing.

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