Contributed by CBI
29/04/2020 - CBI
The Confederation of British Industry’s monthly ‘Distributive Trades Survey’ reported a steep drop in sales in the year to April, matching the decline in December 2008, and marking the joint sharpest fall since the survey began in July 1983.
The survey (conducted between 27 March 2020 and 15 April 2020) also reveals that retailers expect a similar pace of decline in annual sales next month – the weakest expectations in survey history.
67% of retailers reported that coronavirus is having a significantly negative impact on their domestic sales and 39% reported total shutdown of UK activity because of COVID-19.
Orders placed on suppliers in the year to April also fell sharply, with a similar decline expected next month. Retail sales were below seasonal norms to the greatest extent since December 2008 and are expected to remain similarly weak in May.
Internet sales growth fell close to its weakest since the start of this series in August 2009 (the second lowest reading ever, the weakest being in June 2019) and is expected to remain well below the long-run average next month. Average online prices fell in the year to April, for the first time since this question was introduced in August 2009.
“It’s no surprise that the lockdown is hitting retailers hard” Rain Newton-Smith, CBI Chief Economist, said, “two fifths have shut up shop completely for now. And sales of groceries and other essentials also fell, suggesting households may have been dipping into stockpiles built up prior to the lockdown or tightening their belts more generally as incomes take a hit”.
Nearly all retailers reported cash flow difficulties (96%), with just under half facing difficulties meeting tax liabilities (40%). 31% of retailers also faced constraints on the availability of external finance.
Staffing and employee levels have also been affected with 44% of retailers reported temporarily laying off staff, whilst 8% reported permanent staff lay-offs.
“Although the livelihoods of hundreds of thousands of employees in retail remain at risk, there are encouraging signs that the Government’s Job Retention Scheme is providing genuine relief, with many opting for temporary rather than permanent lay-offs”, Newton-Smith said, “Continued support for retailers to cover their fixed costs will be vital for ensuring that businesses are able to re-open when it’s safe and appropriate to do so.”
In other survey results, wholesalers saw sales volumes fall at the fastest pace since January 2009, and motor traders were unanimous in reporting a drop in sales. Wholesalers expect a sharper fall in sales next month, while the vast majority of motor traders expect sales to fall again in the year to May.
Across the UK, the CBI speaks on behalf of 190,000 businesses of all sizes and sectors. The CBI’s corporate members together employ nearly 7 million people, about one third of private sector-employees. With offices in the UK as well as representation in Brussels, Washington, Beijing and Delhi, the CBI communicates the British business voice around the world.
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