High street growth stalls as shoppers are frozen out, says CBI
Wednesday 27 March 2013
A year ago department store John Lewis said it was "too hot to shop" as Britain basked in a heatwave but yesterday the CBI said the high street had effectively ground to a halt as shoppers shivered and inflation hit wallets.
Retail sales stagnated during early March as six months of fading growth in volumes finally vanished completely, according to the business group's latest survey. It found that 26 per cent of chains posted rising sales, while the same number said revenues had fallen, which resulted in the worst performance since August 2012.
Howard Archer, the chief UK economist at IHS Global Insight, said: "Clothing and footwear saw particularly poor sales in March, as they may well have been held back by unseasonably cold weather. However, there was a marked pick-up in furniture and carpets sales, which likely reflects a recent overall modest improvement in housing market activity." Sales volumes were also well below average for the time of year, said the CBI.
The gloom increases the risk of a triple-dip recession with wintry conditions gripping much of the country, and dampens cheer over official figures for February showing a 2.1 per cent bounce in sales. Last week, the fashion chain Next said trading had been "quiet" since the end of January but said it would not know whether this was due to wintry conditions or the economy until the weather improves. John Lewis also partly blamed the recent near-Arctic conditions for a rare 0.3 per cent fall in sales to £62.86m over the week to 16 March.
The CBI holds out prospects of an April recovery, with retailers expecting sales volumes and orders to rise.
Asda's chief merchandising officer Barry Williams said that a "glimmer of hope" for retailers had faded away.
He added: "Pay freezes and the rising cost of living are hitting households hard."
Richard Lowe, the head of retail and wholesale at Barclays, said retailers, particularly in the North, will be "somewhat concerned" about the current cold snap's impact on sales of spring and summer ranges.
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