Slump in high street sales growth


Women carrying shopping bags outdoors

High street sales growth slumped to its lowest level since November after being hit by the later timing of Mother's Day and Easter.

But the latest distributive trades survey from the CBI showed shops are expecting the upcoming celebrations to drive a sales bounce-back over the next month.

The figures revealed the rate of sales growth was far slower than expected in March and marked a sharp reversal of buoyant conditions in February.

A poll of 106 firms between February 25 and March 12 found 36% of retailers overall said sales volumes in the year to March were higher, while 23% said they were down, giving a balance of 13%.

In a sign that conditions are set to improve markedly, a balance of 36% of those surveyed believe sales will rise next month in the highest expected growth rate since December 2010.

Barry Williams, chair of the CBI distributive trades survey panel and Asda's chief merchandising officer for food, said: "The pace of growth has slowed, likely in part down to the later timing of Mother's Day and Easter this year.

"Conversely, this is the same reason many retailers are looking forward to more robust growth next month."

The hard-hit grocery sector saw sales growth increase at the slowest pace for four months, while department stores and other non-specialised retailers saw sales fall, the CBI said.

Supermarkets have reported difficult trading conditions in recent months as cost-conscious consumers turn to discount chains and rein in their spending.

Sainsbury's last week revealed it broke a nine-year run of underlying sales growth in the quarter to March 15, with like-for-like sales excluding fuel dropping by 3.1%.

Other retailers have also been impacted by consumer belt-tightening, with Majestic Wine last week warning that annual profits will be flat after it underestimated the hangover in consumer spending following the festive celebrations.

Howard Archer, chief UK and European economist at IHS Global Insight, said: "Consumers are currently being relatively careful in their spending.

"They seem prepared to spend for specific reasons - such as for Christmas and to take advantage of the clearance sales - but then are inclined to take a breather afterwards."

He added: "The encouraging news for retailers is that consumers' purchasing power should pick up over the coming months with inflation remaining muted and earnings growth accelerating."

High Street casualties

High Street casualties