Upbeat retailers withstand cost of living pressures
Retailers are positive about trading conditions as sales hold up more strongly against cost of living pressures than some had expected.
For the first time since last September, a majority of respondents to the latest distributive trends survey from the CBI expect their sales to rise over the next month.
A net balance of 9% predict an increase in their sales during April, against a run of five months of negative readings.
Retail sales in March were judged to be good for the time of year (+12% from +6% in February). Retailers expect sales to exceed seasonal norms to a broadly similar extent next month (+13%).
Wholesale volumes have also been higher for March over last year and are expected to remain broadly unchanged in April.
“It’s encouraging that activity in the retail sector showed signs of stabilising after a challenging winter,” Martin Sartorius, the CBI’s principal economist, said. “This resilience has helped to inspire some spring shoots of optimism with firms expecting an increase in sales for the first time since last September.
“The Chancellor’s decision to back CBI calls to increase support for occupational health and expand childcare provision will help address some of the labour shortages that retailers are currently facing.
“However, these measures alone do not go far enough for the sector. In particular, more will need to be done to tackle retailers’ ongoing skills gaps, such as through transforming the Apprenticeship Levy into a more flexible Skills Challenge Fund.”
The CBI survey revealed that internet sales fell in March, although they are expected to rebound at a modest pace in April.