UK retail sales recover slightly in March but April is set to be weak

UK retail sales have “stabilised” this month after 10 months of decline. That’s the core message of the latest CBI Distributive Trades Survey that showed sales being “broadly flat”.

First, let’s be clear. The figures aren’t about the absolute volume or value of sales. Instead they relate to the percentage of retailers reporting sales volumes that were either flat or were up or down to some degree.

On that basis, the weighted balance for March was +2% from -7% for February, so it was ever-so-slightly positive even if the CBI interpreted that as broadly flat.

Time to break out the party poppers? Not really. Retailers expect sales to fall again next month (the weighted balance being -25%) as the early Easter partly benefits March but dents April.

Overall, sales were reported as “average” for the time of year (0% from -1% in February). But retailers expect sales to be slightly below seasonal norms next month (-8%).

Order volumes declined in the year to March at a quicker pace than last month (-22% from -14% in February). Orders are set to fall at a similar rate next month (-24%).

Retailers reported stocks as “adequate” in relation to expected sales (-1% from +17% in February). Stock positions are expected to be broadly unchanged next month (+2%).

The CBI also said that internet sales volumes declined in the year to March after having grown slightly last month (-27% from +4% in February). Given that most physical store retailers are omnichannel these days, that’s perhaps unsurprising as it seems that any improvement in their physical store sales seems to come with a dip in their online ops (and vice versa).

Retailers expect internet sales to fall against next month but at a slower pace.

Martin Sartorius, CBI Principal Economist, said: “The stabilisation of retail sales in March should give some hope that the sector’s downturn is bottoming out. The earlier timing of Easter will likely mean weaker year-on-year sales in April, but easing inflation should support retail spending going forward.”