Retailers Report Poor Sales In March From CBI Survey

Retail sales volumes dropped at a rapid pace in the year to March, marking the quickest decline since April 2020 – according to the latest CBI Distributive Trades Survey.

Retailers anticipate the sales decline to continue at a similarly sharp rate in April.

Key findings included:

• Retail sales volumes fell in the year to March at the quickest pace since April 2020 (weighted balance of -52% from -43% in February). Sales are expected to decline at a broadly similar pace next month (-49%).

• Retail sales for the time of year were judged to be “poor” in March, to a greater extent than last month (-23% from -16% in February). April’s sales are set to fall short of seasonal norms to a slightly lesser degree (-19%).

• Online retail sales volumes declined in the year to March, following strong growth last month (-11% from +43% in February). Retailers expect internet sales to contract at a modest pace in April (-5%).

• Wholesale sales volumes fell in the year to March at a slightly softer pace compared to last month (-31% from -36% in February). Wholesalers expect the rate of decline to ease further in April (-27%).

• Total distribution sales volumes continued to fall in the year to March at a fast rate (-38% from -40% in February). Sales are set to contract at a similar pace in April (-36%).

Martin Sartorius, Lead Economist, CBI, said:

“Momentum in the retail sector remained poor in March, with annual sales volumes falling sharply and no signs of an imminent recovery. Retailers report that weak economic conditions continue to weigh on household spending, with subdued activity also evident across the broader distribution sector.

“Steps taken by the government last week to address youth unemployment challenges – including launching foundation apprenticeships in hospitality and retail – are welcome moves to mitigate rising employment costs."

"However, more must be done to lower the cost of doing business, including securing workable outcomes on the Employment Rights Act and delivering a simpler, more competitive tax system. The conflict in the Middle East – which risk fuelling price pressures and squeezing household budgets – underscores the need for the government to take further action to lower the cost of doing business for distribution firms.”

In addition, data from the survey showed:

• Retail orders placed upon suppliers declined at a slower pace in the year to March, following a steep fall in February (-26% from -47% in February). Retailers expect to cut back on order volumes at a slightly quicker pace next month (-30%).

• Retail stock volumes relative to expected sales were moderately elevated in March, though still below the long-run average (+9 from +11% in February; long-run average of +17%). Stock positions are set to remain broadly unchanged next month (+10%).

• Motor trades sales volumes contracted at a slower rate in the year to March (-29% from -47% in February). Motor traders expect sales to decline at an accelerated pace next month (-41%).