UK retail sales volumes dropped sharply in the year to March, recording the fastest rate of decline since April 2020, according to the latest Confederation of British Industry (CBI) Distributive Trades Survey.
The survey indicates the downturn is likely to persist into April, with retailers forecasting another steep fall in sales.
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Retail sales volumes for the 12 months to March weakened significantly, with the weighted balance at -52%, down from -43% in February.
Retailers expect conditions to remain broadly as difficult next month, with a forecast balance of -49%. Assessments of sales for the time of year also deteriorated.
Retailers also described March trading as “poor” to a greater degree than in February, with the balance slipping to -23% from -16%.
Online sales moved into decline after a strong February.
Internet retail sales volumes fell over the year to March, with a balance of -11% compared with +43% the month before.
Retailers anticipate a smaller contraction in April, at -5%.
In wholesaling, sales volumes continued to fall but at a slightly gentler pace than previously, with the balance at -31% in March versus -36% in February.
Wholesalers expect the decline to ease further in April, to -27%.
Across the wider distribution sector, total sales volumes remained under pressure.
The balance stood at -38% in March, compared with -40% in February, and is projected to be -36% in April.
CBI lead economist Martin Sartorius 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.”
The group’s survey also showed a less severe reduction in retail orders placed with suppliers.
Orders declined at a slower rate in the year to March, with the balance improving to -26% from -47% in February.
However, retailers expect order volumes to weaken again in April, with a balance of -30%. Stock levels were described as moderately higher relative to expected sales in March, at +9% compared with +11% in February, and below the long-run average of +17%.
Stock positions are expected to remain broadly steady in April, at +10%.
Motor trades also saw an improvement in March, with sales volumes contracting at a slower pace than the month before.
The balance was -29% versus -47% in February, though motor traders expect a sharper decline in April, with a forecast balance of -41%.
