Supermarket wars hit retail growth

CBI official Barry Williams
CBI official Barry Williams

Ongoing pressure in the supermarket sector has seen retail sales growth slip from five-month highs in May, according to new figures.

The latest CBI survey showed 44 per cent of retailers saw sales rise in the year to June, with 15 per cent reporting a fall; a balance of 29 per cent. That was lower than expected and also below May’s robust balance of 51 per cent.

The report attributed the slowdown to the grocery sector, where volumes were flat compared to a strong showing in May.

Established names such as Tesco and Sainsbury’s are in a price war with discounters Aldi and Lidl.

The survey said growth was a little above average for the time of year, with the clothing sector and goods such as flowers, watches and jewellery performing well.

The measure of expected sales for the month ahead also eased after hitting a 27-year high last month with a balance of 58 per cent.

In June 33 per cent of retailers expected sales to grow slightly next month.

“Summer is a time of optimism for retailers and this year is no different,” said Barry Williams, an Asda executive and survey leader. “Even though growth slowed slightly this month, retailers are not letting that subdue their hopes for the season.”