High street sales remain flat, says CBI

The survey, which had 62 respondents from the retail sector, saw little support to sales growth from the Easter trading period: sales volumes were broadly unchanged in the year to April (the lowest balance since August 2012), continuing a steadily weakening trend in sales growth since November.

Sales volumes were well below average for the time of year, to a much greater extent than expected. The volume of orders also fell on a year ago, once again disappointing expectations of growth, while stock levels remained above their long-run average relative to expected demand.

Expectations for next month have dampened, with retailers expecting both sales volumes and orders to fall.

Chair of the CBI Distributive Trades Survey Panel Barry Williams said: “Retailers were frustrated this month by the on-going stagnation in sales growth. This may be explained in part by the unseasonal weather we suffered, but there is no doubt that high street conditions are tricky with consumers lacking the confidence to go out and spend, as they still feel the pinch in their pocket.”

The key findings of the survey, which was conducted between 26 March and 10 April, were:

• 36 per cent of firms reported that sales volumes were up on a year earlier, and 37 per cent said they were down, giving a balance of -1 per cent. This was the lowest balance since August 2012 (-3 per cent) and much lower than expectations of sales growth (+15 per cent).
• 18 per cent reported sales volumes to be above average for the time of year, and 45 per cent below. The resulting balance of -27 per cent was much weaker than expected (-1 per cent).
• 27 per cent placed more orders with suppliers than they did a year ago, and 40 per cent fewer, resulting in a rounded balance of -12 per cent, against more positive expectations (+7 per cent).
• Clothing (-28 per cent) and footwear and leather (-61 per cent) were among the sectors that saw a fall in sales. These were partly offset by rising sales in other sectors such as grocers (+20 per cent), furniture and carpets (+77 per cent), and non-store retailers (+67 per cent). For grocers, this was the first year-on-year rise in sales in three months.
• Sales volumes are expected to see a small fall in the year to May, with 27 per cent of firms expecting an increase versus 33 per cent predicting a fall, resulting in a balance of -6 per cent. Volume of orders placed upon suppliers are also expected to fall, with 21 per cent of retailers expecting order volumes to be up on a year ago and 36 per cent down, giving a balance of -15 per cent.