1 May 2008
Year-on-year retail sales fell markedly
in April as poor weather and the early Easter added to
the economic slowdown to dent spending, the CBI has said.
Sales of big-ticket items, particularly those tied to the
housing market, saw some of the biggest falls, according
to the business organisation's Distributive Trades Survey.
The monthly snapshot of the high street
showed that 52% of retailers said sales volumes were down
on a year ago compared to 25% who said they were up. The
rounded balance of -26 was the weakest since November 2005
and is only expected to improve to -15 in May, signalling
further falls in sales volumes.
Unsurprisingly, half of retailers (53%) said sales for the time of year were
poor while 15% reported them as good. The balance (-38) is the weakest since
November 1992 (-43).
But, the CBI said, while high street
activity has certainly dipped as the economy has slowed,
these results, surveying the first half of the month, need
to be put into context.
In 2007, Easter fell in April and the
country enjoyed a mini-heatwave, which helped lift the
balance of retailers reporting year-on-year sales growth
to its highest for three years. However in 2008, the four
day holiday weekend was in March and the weather was wet
and windy, quashing shoppers' desire to hit the high street.
The three-month moving average - which
smooths out monthly volatility - slipped from +1 in March
to -9 this month, continuing its downward trend since last
summer.
As a result of slower sales, retailers'
orders to suppliers fell back to a balance of -28, its
lowest since November 2005 (-38), as stock levels remained
adequate or better.
Looking at the sector in detail, sellers
of durable household goods reported the weakest sales balance
(-84), the lowest since October 2005 (-87). Hardware, china & DIY
sales were down on a year ago (-59), as were furniture & carpets
(-15). Clothing was also down (-25) although shoes & leather
goods were up (+37).
The grocery sub-sector, which has seemed
robust so far, recorded its lowest balance (+3) since November
2006 (-56).
Ian McCafferty, the CBI's chief economic adviser, said: "There is no doubt
that consumers are tightening their belts as the mood about the economy and
its outlook worsens. The trend in recent months has been one of slowing growth
and now we've seen a fall in sales volumes, particularly so for goods related
to the housing market.
" The survey needs to be seen in
the context of the timing of Easter this year and the poor
weather, which have further dampened sales this month.
Nevertheless trading conditions are challenging
for retailers and sales are expected to fall again in May,
albeit at a slower rate."
A balance of +47% of wholesalers reported an increase in sales compared to
the same time in 2007, reversing four months of falls. This lifted the three-month
average to +3.
Motor traders reported their highest
balance (+29) since last October (+33), and expect this
growth in sales to continue next month.
