UK retail sales volumes fall sharply in March

UK retail sales volumes fell in the year to March 2019, compounding a subdued start to the year, according to the latest monthly Distributive Trades Survey by the Confederation of British Industry (CBI).

The survey of 105 firms, of which 50 were retailers, showed that retail sales volumes fell sharply (-18%). This was the fastest contraction in 17 months and marked a four-month run in which sales have not grown. This disappointed retailers’ expectations for strong growth in March, but sales volumes are expected to rise again in April (+15%).

Orders placed on suppliers also fell in the year to March (-13% from +7% in February), but are expected to return to modest growth in April (+6%).

Late Easter may have distorted sales growth

It is possible that year-on-year sales growth in March has been distorted by the later timing of Easter this year. Indeed, sales volumes actually rose further above average for the time of year (+13% from +4% in February) and are expected to remain above seasonal norms in April (+12%).

Year-on-year growth in internet sales slowed in March (+21%) to the lowest rate in 12 months. Growth is expected to pick up in the year to April (+31%).

Wholesalers reported the slowest pace of annual growth in sales volumes in nine months (+13%) and are expecting a further slowing next month (+6%). Motor traders also reported their fastest fall in sales volumes for 11 months (-16%). Sales for the time of year were seen as the poorest since November 2014 (-11%), and are expected to fall further below seasonal norms in April (-36%).

Across the broader economy, underlying conditions remain subdued, particularly as Brexit uncertainty and slower global growth continue to hold back momentum.

“No-deal must be averted at all costs”

Anna Leach, CBI head of economic intelligence, commented: “Even accounting for Easter timing, the high street’s poor run continues. While real wage growth is picking up, consumer confidence has been hit by escalating uncertainty over Brexit and concern over the economy’s future.

“The pain currently being felt on the high street is yet another reason why it is so vitally important that politicians agree a deal in Parliament that is acceptable to the EU and protects our economy. No-deal must be averted at all costs.”

Key findings from the survey

Retailers

  • 28% of respondents reported that sales volumes were up on a year ago in March, while 46% said they were down, giving a balance of -18%.
  • Retailers expect sales volumes to pick up next month (+15%), with 25% expecting a rise and 10% expecting a fall.
  • Sales for the time of year improved in March, with a balance of +13%, up from +4% in February.
  • The volume of orders placed on suppliers fell in the year to March, with a balance of -13%, down from +7% in the year to February. Orders are expected to improve in April (+6%).
  • Year-on-year growth in internet sales volumes slowed in March (+21%). This represented the slowest growth rate for 12 months. A pick-up in growth is expected in April (+31%).
  • Retail sales fell in five subsectors, while volumes in the grocers’ sector stayed broadly flat (-3%), following strong growth in the year to February (+45%). Among the biggest negative contributors to the headline figure this month were recreational goods (-67%), hardware and DIY (-62%) and other normal goods (-42%).

Wholesalers

  • 43% of wholesalers reported sales volumes to be up on last year and 30% said they were down, giving a balance of +13%.

Motor traders

  • 10% of motor traders reported sales volumes to be up on last year and 26% said they were down, giving a balance of -16%.

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