UK retail sales fell in March at the fastest rate for more than a year, as Britain’s mounting political crisis over Brexit weighed on consumers’ willingness to spend.
As reported by the Guardian, the latest figures from the Confederation of British Industry, covering high street firms responsible for a third of employment in retailing, showed that retail sales slid in March by the most since October 2017. The business lobby group’s monthly retail sales index plunged to -18% in March from a level of 0% in February – meaning more retailers reported a slump in sales than reported an increase. City economists had expected a reading of +5%.
Anna Leach, the head of economic intelligence at the CBI, commented: “While real wage growth is picking up, consumer confidence has been hit by escalating uncertainty over Brexit and concern over the economy’s future. The pain currently being felt on the high street is yet another reason why it is so vitally important politicians agree a deal in parliament that is acceptable to the EU and protects our economy. No-deal must be averted at all costs.”
The weaker picture painted by the survey of 105 firms, of which 50 were retailers, could partly reflect the fact that year-on-year sales growth was distorted by the later timing of Easter this year. The CBI cautioned that the volume of sales was above average for the time of year and was expected to remain above seasonal norms in April.
Another factor is that, unlike last year, the survey this year will not have captured any boost to sales that might come from Mother’s Day, which falls on 31st March.
However, economists said the survey still indicated that a tough period for the high street had continued this month, with Westminster remaining gridlocked over Brexit. The balance on the CBI survey has not been positive for four months, indicating that retail sales have remained weak.
Although the survey data paints a gloomy picture of consumer spending in the final months before Brexit, official figures from the Office for National Statistics point to a stronger performance than expected. Record employment levels and the strongest annual wage growth in a decade have helped rebuild households’ spending power, although economists fear a no-deal Brexit could sap demand.