The “Beast from the East” snowstorms have sent a chill down the high street, with sales dropping for the first time in six months.
According to the Confederation of British Industry’s (CBI) latest monthly Distribution Trades Survey, 32 per cent of retailers said that sales volumes were up in the year to March, whilst 40 per cent said they were down giving a balance of -8 per cent.
This is down from the +8 per cent reading in February and the first negative mark since last October.
Only 8 per cent of retailers said their volumes of sales was good for the time of year, with 35 per cent saying they were poor, giving a balance of -27 per cent. That is the lowest survey balance since April 2013.
The fall in retail sales was experienced across all sectors with non-specialised stores such as department stores, furniture and carpets, clothing, and other normal goods being the worst performers.
Sales volumes increased amongst grocers, footwear and leather retailers and hardware and DIY.
Online retail sales also slowed sharply in the year to March, with sales rising at the weakest pace since the start of the series in 2009.
Looking ahead to next month, retailers expect sales volumes and orders placed with suppliers to grow, though at a fairly subdued pace.
Internet sales are expected to pick-up slightly in the year to April, but growth is expected to remain far below average.
Commenting on the sales drop, Ben Jones, CBI principal economist, said: “Against a backdrop of stagnating household incomes and weak consumer confidence, the lengthy cold snap earlier this month has heaped added pressure on retailers. Freezing conditions and transport disruption caused people to avoid the High Street. With many forced to work from home telecoms firms saw record internet traffic, yet on-line shopping slowed sharply given the potential for disrupted deliveries.”
“As winter finally loses its grip, retailers expect a recovery in sales growth in April, albeit a fairly tepid one. While the latest wage and price data point to the first green shoots of a recovery in real household incomes, any gains are likely to be modest, with conditions for retailers likely to remain challenging for some time yet.”
On the prospects for the rest of 2018, the CBI said it expected the recent squeeze on household incomes to ease in the months ahead, but with real earnings growth likely to remain tepid relative to pre-crisis norms “retailers and other consumer-facing companies will continue to operate in a difficult environment”.
Sign up to our newsletter to get the latest from Business Advice.