UK sales drop sharply
Lowest level for a decade, says CBI
April 1 2003
UK retail sales have seen their biggest volume fall in more than a decade, according to the latest CBI figures.
However, an unexpected warm spell gave a boost to the DIY sector as consumers embarked on early spring makeovers for their homes and gardens.
Only 28 per cent of retailers said sales were up on March last year, according to the CBI’s monthly Distributive Trades Survey, while 41 per cent said they were down. The difference between the two gives a balance of minus 13 per cent, the first significant year-on-year fall since January 1999, and the lowest balance, minus 15, since July 1992.
Sales were well below average for the time of year, with the outlook staying bleak. Retailers anticipate sales will be unchanged in the year to April, the weakest expectations for eight years.
Stocks have been run down to the lowest level for almost two years, as retailers cut their orders with suppliers for the third successive month. Demand weakened across all retail sectors except hardware, china and DIY, where significant sales growth was reported.
The DIY sector benefited from almost a fortnight of unexpectedly warm early spring weather. Robust sales growth reported by wholesalers from sectors such as builders merchants and electrical installation materials seemed to confirm that consumers are investing in their current homes rather than planning a move.
Ian McCafferty, CBI chief economic adviser, said: “Sales growth has stalled in almost every retail sector. These results confirm our fears that consumer confidence has been affected by uncertainties surrounding the war in Iraq, the impending tax rises and worries about the housing market.
“Retailers have already done their best to prop up consumer confidence by cutting prices and heavy discounting. They will be hoping that the Budget does nothing further to keep people away from the shops.”
