Retail sales slump in March amid weak confidence - CBI Distributive Trades Survey

Retail sales volumes dropped sharply in the year to March, marking the sector’s sixth consecutive month of decline. That’s according to the latest CBI Distributive Trades Survey.

Retailers expect sales to fall again in April, but at a slower rate.

Key findings included:

• Retail sales volumes fell at an accelerated rate in the year to March (weighted balance of -41% from -23% in February). Sales are expected to fall at a slower pace next month (-30%).
• Sales for the time of year were judged to be below seasonal norms in March, to a similar extent to February (-36% from -34% in February). Sales are expected to disappoint again in April (-35%).
• Online retail sales volumes declined in the year to March at a similarly quick rate to last month (-27% from -28% in February) and are expected to fall at a broadly unchanged pace in April (-26%).
• Wholesale sales volumes contracted at a faster rate in the year to March (-29% from -19% in February). Wholesalers anticipate sales to fall at a marginally slower pace next month (-25%).
• Total distribution sales volumes (including retail, wholesale, and motor trades) declined at a fast rate in the year to March (-32% from -26% in February). Firms expect sales to fall at a slightly slower pace next month (-27%).

Martin Sartorius, Principal Economist, CBI, said:

“Annual retail sales volumes fell markedly in March and are expected to continue declining next month. Firms across the retail and wholesale sectors reported that global trade tensions and the Autumn Budget are weighing on consumer and business confidence, which is leading to reduced demand.

“Tomorrow's Spring Statement is likely to focus on the persistent challenges facing the UK economy, reinforcing the need for policies that boost businesses’ confidence to invest.

“Reforming business rates, supporting the British Business Bank’s Growth Guarantee Scheme, and properly resourcing the Growth and Skills Levy could support businesses’ investment plans and drive the government’s growth ambitions.”

In addition, data from the survey showed:

• Retail orders placed upon suppliers fell in the year to March at the same rapid pace as in February (-38%). Orders are expected to decline at a similar rate next month (-41%). 
• Retail stock volumes in relation to expected demand were firm in March (+20% from +16% in February; long-run average +17%) but are set to soften slightly in April (+12%).
• Motor trade sales volumes fell at a considerably slower rate in the year to March (-21% from -58% in February). Sales are expected to fall at a marginally faster pace in April (-26%).