Retail sales forecast to plunge as stockpiling eases and shops shut - survey
Retailers saw demand jump in early March because of coronavirus-led stockpiling, but expect sales to plunge in the coming months, according to a widely-watched survey released on Wednesday.
The latest Distributive Trends Survey from the Confederation of British Industry found overall retail sales were broadly flat in the year to March, with a balance of -3% compared to +1% in February. Grocers reported a surge in volumes, however, with a balance of +94% against +29% a month previously as panicked shoppers rushed to stockpile food and household items. Other sectors reported falls in sales.
However, going forward, and a balance of -26% believe retail volumes will fall sharply in the year to April, the weakest expectations since April 2009.
The CBI said the expected decline in sales volumes was across most sectors, with grocers predicting sales will be stable over the year.
Ben Jones, CBI principal economist, said: "These are extraordinary times for the retail sector. Grocers are seeing a temporary increase in demand because of coronavirus. But many other retailers are seriously suffering as household put off non-essential purchase and social distancing keeps people away from the high street."
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, called the survey - which questioned 110 firms between 26 February and 13 March - a pre-shutdown snapshot and warned of "unprecedented" falls to come.
He said: "The CBI’s survey closed ten days before the government ordered the closure of all shops except supermarkets and pharmacies and told all but critical workers to stay at home. The net balance of retailers expecting sales for the time of year to be higher than normal in April collapsed to -42% - its lowest reading since February 2009 – from -8% in January, but even it likely understates the forthcoming plunge in retail sales.
"A back of the envelope guess at the hit to retail sales during lockdown weeks, assuming 80% declines in non-food and petrol sales, countered only partially by a 20% increase in food store sales and a doubling of non-store sales, points to around a 13% shortfall in total retail sales from normal levels. If, as we expect, the lockdown is extended beyond its initial three-week period, then many high street retailers, already skating on thin ice, likely will not survive."