Covid 19: UK retail sales plummet at historic levels - CBI survey

(Sharecast News) - UK retail sales collapsed in early April, a widely-watched survey reported on Tuesday, as the Covid-19 pandemic shut shops and kept people at home.
The CBI Distributive Trades Survey recorded the sharpest fall in sales in the year to April since December 2008, with a balance of -55% compared to -3% in March. It was joint lowest balance since the survey begun.

Every sub-sector reported a negative balance, with grocers tumbling from 94% to -27%, and specialist food and drink falling to -4% from 42%, as lockdown measures were introduced and stockpiling eased.

Retailers also expect a similar pace of decline next month, with a balance of -54% the weakest expectation on record.

Even internet sales felt the pinch. Growth slowed to a balance of 8% in April from 23% in March, and while it is expected to pick up in May to 15%, it remains well below the long-run average of 46%.

Rain Newton-Smith, the CBI's chief economist, said: "It is no surprise that lockdown is hitting retailers hard. Two fifths have shut up shop completely for now, and sales of groceries and other essentials also feel, suggesting households may have been dipping into stockpiles or tightening their belts."

The survey of 158 businesses carried out between 27 March and 15 April carried additional Covid-19 specific questions. Of those, 67% of retailers reported that the virus was having a "significantly negative impact" on sales, 39% reported a total shut down in UK activity and 44% reported laying off staff. Nearly all retailers - 96% - reported cash flow difficulties.

Howard Archer, chief economic advisor to the EY Item Club, said that near-term fundamentals for consumer spending had "clearly taken a substantial downturn as a result of coronavirus. Some people have already lost their jobs, despite the supportive government measures, while others may be worried that they may still end up losing their job once the furlough scheme ends.

"Furthermore, consumers are likely to adopt a much more cautious approach to discretionary purchases given the current economic environment."