Retailers on the British high street considered sales to be unseasonably poor for the third month in a row in April and consumer demand is set to remain low in the months to come, according to new research.
The Confederation of British Industry (CBI) Distributive Trades Survey covering the two weeks from March 30th shows that 45 per cent of retailers experienced an increase in year-on-year sales, but 24 per cent saw trading dip.
Despite the positive balance only 12 per cent of retailers considered sales to be good for the time of year, compared to 35 per cent who thought their trading was poor compared to previous Aprils.
A high percentage of the high street businesses that took part in the CBI survey said they now hold more stock than there is demand for, and orders placed by retailers with suppliers are expected to fall in May.
Judith McKenna, Chair of the CBI Distributive Trades Panel and Asda’s Chief Financial Officer, said: “Retailers are having to pull out all the stops to achieve sales growth, and this month was no exception.
“The squeeze on people’s pockets from rising commodity prices means consumers are seeking out value wherever they can.”
Today’s study indicates that sales growth at the UK’s grocers and clothing retailers accelerated in May, compared to April, but trading of durable household goods, including big-ticket electrical items, and hardware & DIY products was down month-on-month.
McKenna added: “This month’s survey shows sales of dearer goods, such as consumer durables, hardware and DIY, are a particular stretch for hard-pressed households.”
Richard Lowe, Head of Retail & Wholesale at Barclays Corporate, said he remains cautious about retail’s performance in the months ahead.
Reflecting on today’s CBI figures, he remarked: “As disposable income continues to be squeezed consumers are thinking twice before purchasing anything other than the essentials.
“With the outlook set to remain uncertain, retailers will be fighting hard for crucial consumer spending. Even with the boost provided by the royal wedding and the potential launch of the latest iPhone, we have a summer of slower trade ahead.”