Thursday, August 18, 2022

Retail sales growth flat in March

UK retail sales growth flatlined this month, putting an end to six months of slowing growth, though retailers anticipate a pick-up in April, data released today revealed.

According to the CBI‘s latest monthly Distributive Trades Survey, 26 per cent of firms reported a rise in sales volumes while the same amount reported a decline, giving a balance of zero, which is the lowest since August 2012.

Analysts had expected growth of nine per cent, particularly given the 2.6 per cent rise in sales in February which was announced by the Office for National Statistics last week, though sales volumes were “well below average for the time of year, and weaker than expected”, a statement from the CBI said.

Orders were also broadly flat on the same period last year, though this exceeded expectations while stock levels also saw a boost.

In the year to March, grocers recorded no sales growth, an improvement on February‘s 26 per cent decrease while clothing & footwear sales also plummeted, though sales volumes are expected to improve as weather improves in the coming month.

While 22 per cent of firms expect a decrease in sales volumes in the month ahead, 37 per cent predict growth, giving a balance of 15 per cent and Barry Williams, Asda Chief Merchandising Officer for Food, and Chair of the CBI Distributive Trades Survey Panel, welcomed the bright outlook.

“This month we‘ve seen a glimmer of hope for retailers fade away, with the news that six months of sales growth has come to an end,” Williams said.

“All eyes are now on April when retailers expect sales to return to form.

“However, pay freezes and the rising cost of living are hitting households hard and, added to a challenging economic picture, there may well be more tough trading conditions ahead.”

Analysts though, fear that sales may be affected by last week‘s Budget, which offered little relief for cash-strapped consumers and analyst firm Capital Economics‘ UK Economist Martin Beck said: “March‘s CBI Distributive Trades Survey was something of a mood dampener following a run of good news from the retail sector.

“With real pay continuing to be squeezed and little in the recent Budget to support incomes this year, this may be a harbinger of things to come.”


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