UK retail sales fall for seventh month, outlook worsens: CBI

Retail sales volumes in the UK fell for the seventh consecutive month in April, although the pace of decline eased compared to March, according to the latest Confederation of British Industry (CBI) Distributive Trades Survey. Retailers, however, anticipate a sharper contraction in May.

The survey showed retail sales volumes recorded a weighted balance of -8 per cent in the year to April, improving from -41 per cent in March. Despite this, firms expect sales to deteriorate further next month, with a projected balance of -33 per cent. Seasonal sales were still considered ‘poor’ in April, though marginally better than March, with expectations for a more pronounced shortfall in May.

Online retail sales volumes were broadly flat in April, -1 per cent compared to -27 per cent in March, and are expected to remain stable in May (+2 per cent), CBI said in a release.

Wholesale sales volumes experienced a steep decline in April, one of the sharpest drops since September 2020, at -33 per cent, compared to -29 per cent in March. A slower fall of -26 per cent is forecast for May.

Meanwhile, total distribution sales volumes, including retail, wholesale, and motor trades, continued to contract firmly, registering -26 per cent in April.

"Annual retail sales volumes fell more slowly in April, but firms remain pessimistic about the outlook due to the impact of Autumn Budget measures, persistently weak consumer sentiment, and global economic uncertainty. These themes were echoed in the wholesale sector, which reported one of the sharpest sales declines in the past four years,” Martin Sartorius, principal economist, CBI, said.

Retailers also reported a slower pace of decline in orders placed with suppliers (-24 per cent in April from -38 per cent in March) but anticipate accelerating cutbacks next month (-29 per cent). Retail stock levels relative to expected demand remained steady (+21 per cent in April), although they are expected to soften to +11 per cent in May.

Motor trade sales volumes fell sharply, with a -50 per cent reading in April compared to -21 per cent in March, although a slower decline is anticipated in May (-34 per cent).

"With no sales recovery on the horizon, firms across the distribution sector want to see the government use every lever available to boost business and household confidence during these challenging times. Making it easier to invest in skills by reforming the Apprenticeship Levy, using the forthcoming Spending Review to boost tech adoption, and continuing to prioritise free and fair trade are key measures that would help kickstart economic growth," Sartorius added.

ALCHEMPro News Desk (HU)