The CBI’s latest Distributive Trades Survey (conducted February 28th to March 16th) shows that 42 per cent of retailers saw their volume of sales rise in the year to March, while 27 per cent said they fell.
The resulting balance of +15 per cent exceeded retailers’ expectations of zero growth. Meanwhile, retailers anticipate little change in the pace of sales growth next month.
Sales in March were considered poor for the time of year, with just 16 per cent of retailers reporting sales as good and 40 per cent saying they were poor. The balance of -24 per cent is the lowest figure since August 2009. Retailers anticipate that sales will continue to underperform against seasonal norms in April (-16 per cent), albeit to a slightly lesser extent.
At +19 per cent, the three-month moving average of volume of sales growth was at its lowest rate in eight months, considerably down on February’s figure of +33 per cent. If expectations are realised, it will decline further next month.
The figures for March show that, for the first time in nine months, orders placed by retailers with suppliers were down year-on-year. This was broadly in line with expectations and retailers anticipate that orders will be largely unchanged in the year to April.
Ian McCafferty, CBI chief economic adviser, said: “Sales growth picked up slightly for retailers compared with last month, but look beneath the surface and conditions remain tough on the high street. Even the best performing sectors – namely grocers and clothing – have seen volumes continue to fall.
“With inflation edging higher and earnings growth only modest, household budgets are under increasing pressure. Consumer demand will remain weak in the coming months.”
Judith McKenna, chair of the CBI Distributive Trades Panel and ASDA chief financial officer, commented: “Retailers are working harder than ever to attract more customers through their doors by delivering value where they can. There's no doubt, however, that people are feeling the squeeze as the cost of everyday commodities rises faster than incomes."