Retail conditions darken in April – CBI Distributive Trades Survey

Retail sales volumes were judged to be below seasonal norms in April, to a greater extent than in March, according to the latest CBI Distributive Trades Survey. Separately, sales volumes declined at a sharp pace in the year to April.

Looking ahead, retailers anticipate that sales volumes will disappoint for the time of year in May, while continuing to fall rapidly on an annual basis.

Key findings included:

• Retail sales for the time of year were judged to be “poor” in April, to a greater extent than last month (-32% from -23% in March). May’s sales are set to fall short of seasonal norms to a greater degree (-43%).

• Retail sales volumes dropped at a rapid rate in the year to April (weighted balance of -68% from -52% in March). Sales are expected to continue declining at a sharp pace next month (-60%).

• Online retail sales volumes dropped in the year to April at the fastest rate since January 2024 (-51% from -11% in March). Retailers expect internet sales to recover at a modest pace next month (+4%).

• Wholesale sales volumes fell in the year to April at a quick rate (-32% from -31% in March). Wholesalers expect the pace of decline to quicken slightly next month (-37%).

• Total distribution sales volumes continued to fall in the year to April at a fast rate (-39% from -38% in March). Sales are set to contract at a broadly similar pace in May (-42%).

Martin Sartorius, Lead Economist, CBI, said:

“Retail conditions deteriorated in April, with sales momentum weakening noticeably against a backdrop of fragile consumer confidence. Activity remained subdued in the wholesale sector, with firms reporting headwinds from high costs and muted demand.

“With the economic impact of the Iran conflict becoming clearer, firms will be looking to government to recognise that easing cost of living pressures depends on tackling the cost of doing business. For the distribution sector, that means securing appropriate landing zones on the Employment Rights Act, delivering meaningful business rates reform, and exploring further how non-energy policy costs can be removed from electricity bills.”

In addition, data from the survey showed:

• Retail orders placed upon suppliers declined at a sharp pace in the year to April (-46% from -26% in March) and are set to be cut back at a similar rate in May (-45%).

• Retail stock volumes relative to expected sales remained moderately elevated in April, though slightly below the long-run average (+12% from +9% in March; long-run average of +17%). Stock positions are set to remain broadly similar next month (+10%).

• Motor trades sales volumes recovered in the year to April, increasing for the first time since June 2024 (+6% from -29% in March). However, motor traders anticipate sales to decline at a moderate pace next month (-20%).