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Published
Mar 26, 2021
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April retail sales set for take off, but don’t expect fireworks - CBI

Published
Mar 26, 2021

​March was bad, April is expected to improve. That, in essence, sums up the latest sales report from the Confederation of British Industry (CBI) showing exactly what you already knew and probably expect for UK retail.


Photo: Public domain/Pixabay


So let’s start with the positive. The latest monthly Distributive Trades Survey survey – which aggregates the views of 142 businesses, including 66 retailers – shows expectations that retail sales volumes will grow in April by 17%. However, don’t expect market fireworks as the CBI expects a “muted recovery” to begin with, given that the 12 April reopening date has cut the month almost in half.

And as physical retail picks up, internet sales are expected to slow to around the long run average next month (+48%). Growth also eased in the year to March (balance of +60%) given that February saw a record performance (+75%).

By contrast, wholesale growth expectations for the year to April are the highest since September 2018 (+33%), presumably in preparation for the start of a spring revival.

This is the first time overall retail sales expectations have been positive since December 2019, reflecting the anticipated reopening of non-essential retail from the middle of the month, the CBI said.

Of course, the +17% figure is boosted by the relatively low base for comparison, given that April 2020 saw the joint sharpest fall in sales since the start of its data in 1983, the report also noted.

However, overall the report suggests April sales volumes are expected to remain “poor for the time of year” as sales are expected to be below seasonal norms to a lesser extent (-19%).

"Orders placed with suppliers are expected to be broadly flat in the year to April, following sharp falls in the first three months of 2021”, it said. 

And March’s performance? Retail sales volumes remained well below seasonal norms just as they had been last month (March balance of -45%, from -45% in February).

Sales volumes fell particularly sharply in sectors such as clothing, footwear, department stores and furniture & carpets.

The survey revealed a steep drop in the volume of retail sales, highlighting the severe impact of the lockdown for many non-essential retailers. 

But even the grocery sector suffered too when comparisons come into play. Despite remaining open to customers, the sector reported the biggest year-on-year decline in sales since April 2020.

However, the decline was in comparison to a period of extraordinarily high demand in March 2020 as shoppers stocked-up on essential items ahead of the first national lockdown. 

Despite falling in comparison with last March, grocery sales were seen as “good for the time of year” this month. Similarly, hardware & DIY stores reported that sales were above seasonal norms.

Ben Jones, principal economist at the CBI, said: “Retailers are looking forward to April with a sense of optimism, given the potential re-opening of the sector across the UK. 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".

He added: “There may be several reasons for this caution, including the possibility of spending shifting away from retail to other sectors that are scheduled to re-open, such as outdoor hospitality, as well as continued requirements for social distancing in stores and expectations of a gradual return of footfall in town and city centres. Clothing and footwear firms in particular remained fairly downbeat.

“The extension of support announced in this month’s Budget was therefore hugely welcome. More broadly, retailers will be keen for the UK and EU to work together to minimise disruption, avoiding unnecessary cost and complexity for firms as the new trading relationship beds in”.

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