UK retail sales volumes decline sharply in March - CBI

The Confederation of British Industry (CBI) reported on Thursday its latest survey of retailers showed retail sales volume balance stood at -45 in the year to March, unchanged from -45 in February, being well below seasonal norms and highlighting the severe impact of the lockdown for many non-essential retailers.

Economist had forecast the reading to improve to -37.

However, retail sales volumes were expected to grow in the year to April (+17). This is the first time the expectations have been positive since December 2019, reflecting the anticipated reopening of non-essential retail from mid-April, but also the relatively low base for comparison, given that April 2020 saw the joint steepest drop in sales since the start of the survey in 1983.

The report also revealed that the retail orders balance decreased in March at broadly a similar pace as last month (balance of -33 from -36) and was seen to be generally flat in the year to April (+1). Meanwhile, internet sales eased in the year to March (balance of +60, from February’s record +75) and were forecast to slow to around the long-run average of 46 next month (+48). 

In other survey results, stock levels in relation to expected sales decreased in March to below their long-run average of +18 (balance of +9, from +22) and are expected to be broadly adequate next month (-3).

“Retailers are looking forward to April with a sense of optimism, given the potential re-opening of the sector across the UK,” noted Ben Jones, Principal Economist at the CBI. “However, it is clear that the potential easing of domestic restrictions next month will not be a panacea for all retailers. Expectations point to a fairly muted recovery, especially when considering that base effects will tend to flatter annual growth next month, given the historic drop in sales in April 2020.”