The latest CBI figures are out revealing Year-on-year growth in internet sales slowed in March (+21%) to the lowest rate in 12 months. Growth is expected to pick up in the year to April (+31%), the CBI notes that it is possible that year-on-year sales growth in March has been distorted by the later timing of Easter this year.
The high street fared even worse as retail sales volumes fell in the year to March, compounding a subdued start to 2019. The survey of 105 firms, of which 50 were retailers, showed retail sales volumes fell sharply (-18%), the fastest contraction in 17 months and marking a four-month run in which sales have not grown. This disappointed retailers’ expectations for strong growth in March, but sales volumes are expected to rise again in April (+15%).
Orders placed on suppliers also fell in the year to March (-13% from +7% in February), but are expected to return to modest growth in April (+6%).
Wholesalers reported the slowest pace of annual growth in sales volumes in nine months (+13%) and are expecting a further slowing next month (+6%). Motor traders also reported their fastest fall in sales volumes for 11 months (-16%). Sales for the time of year were seen as the poorest since November 2014 (-11%), and are expected to fall further below seasonal norms in April (-36%).
The CBI say that across the broader economy, underlying conditions remain subdued, particularly as Brexit uncertainty and slower global growth continues to hold back momentum. For more detail on our view of the outlook, see the CBI’s December Economic Forecast.
CBI Key Stats
Retailers
- 28% of respondents reported that sales volumes were up on a year ago in March, while 46% said they were down, giving a balance of -18%
- Retailers expect sales volumes to pick up next month (+15%), with 25% expecting a rise and 10% expecting a fall
- Sales for the time of year improved in March, with a balance of +13%, up from +4% in February
- The volume of orders placed on suppliers fell in the year to March, with a balance of -13%, down from +7% in the year to February. Orders are expected to improve in April (+6%)
- Year-on-year growth in internet sales volumes slowed in March (+21%) representing the slowest growth rate for 12 months. A pick-up in growth is expected in April (+31%)
- Retail sales fell in five sub-sectors, with volumes in the grocers’ sector staying broadly flat (-3%), following strong growth in the year to February (+45%). Among the biggest negative contributors to the headline figure this month included recreational goods (-67%), hardware & DIY (-62%) and other normal goods (-42%)
Wholesalers
- 43% of wholesalers reported sales volumes to be up on last year and 30% said they were down, giving a balance of +13%
Motor trades
- 10% of motor traders reported sales volumes to be up on last year and 26% said they were down, giving a balance of -16%
Expert Opinion
“Today’s CBI Distributed Trades Survey has highlighted a significant drop in retail sales year-on-year from March 2018, and marked the fourth consecutive month in which sales have remained stagnant. Even online sales saw its slowest growth in 12 months. While this decline in sales can be partially attributed to seasonality, it also is a stark reflection on how many retailers are struggling and why our high streets are currently faltering.
According to Deloitte, the optimal combination of online and offline offers makes it possible for retailers to double their sales compared to using a single channel. But, research from Exasol shows that, despite the big eCommerce brands having set the standards for omnichannel and customer experience, more than half of UK retailers are still behind when it comes to adopting the data strategy required to provide a single customer view. Customers don’t only wish for, but expect, an exceptional experience across all channels, and leading retailers can only achieve this with better data analysis.
Retailers need to be able to deliver on modern customer expectations if they are going to achieve sustainable growth for their business during these uncertain times. To do so, they will need to look at how technologies, such as predictive analytics, can be implemented to help elevate the customer experience and improve sales margins. This will inevitably help provide customers with the right product, at the right price, and in the right medium, whether that be online or in-store, and at the right time.”
– Sam Sibley, Partnerships and Alliances Manager, Exasol
