UK retail sales in the month of March tumbled by the most since April 2020 and the closure of the majority of non-food shops during the first weeks of the Covid-19 pandemic.
The latest data from the Confederation of British Industry (CBI) said that retail sales sunk to -52 in March, down from an already weak -43 in February, and that businesses only expected a marginal improvement to -49 in April.
The CBI also found that retail sales for March were judged to be ”poor” to a greater extent than in February (-23% from -16%) and that online retail sales volume declined in March compared to the previous month (down to -11% from +43%).
The CBI findings come from a survey of 50 retailers conducted between February 25 and March 13, mostly falling after the start of the war in the Middle East.
The war has pushed up petrol prices in the UK, and the Bank of England has said it expects this to increase broader inflation as the year goes on.
However, the CBI didn’t directly attribute this fall in sales to the conflict. Although it did say that the war meant that the government would need to ease the cost impact to businesses from new employment rights and taxes.
“Retailers report that weak economic conditions continue to weigh on household spending, with subdued activity also evident across the broader distribution sector,” CBI lead economist Martin Sartorius said.
“The conflict in the Middle East – which risks fuelling price pressures and squeezing household budgets – underscores the need for the government to take further action to lower the cost of doing business for distribution firms,” Sartorius added.
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