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.
