CBI survey took place before big freeze – which is estimated to be costing the UK economy £500m a day in lost output
Spending on Britain’s high streets in March is at its weakest since last summer as pay freezes and rising inflation curb consumer spending power.
The monthly retail health check by the CBI found that as many shops said business was down year on year as reported an increase.
Barry Williams, Asda’s chief merchandising officer for food, and chairman of the CBI distributive trades survey panel, said: “This month we’ve seen a glimmer of hope for retailers fade away, with the news that six months of sales growth has come to an end. All eyes are now on April when retailers expect sales to return to form.
“However, pay freezes and the rising cost of living are hitting households hard and, added to a challenging economic picture, there may well be more tough trading conditions ahead.”
According to the CBI’s distributive trades survey, 26% of firms said sales were higher than in March 2012, but the same percentage said they were lower.
The sluggish performance was the weakest since August 2012 and continued a declining trend seen since a mini boom last autumn, when firms reporting year-on-year sales growth outstripped those seeing lower sales by 33 percentage points.
Only one in six firms (17%) said current sales were good for the time of year, while 37% said they were poor. The CBI said this was a far weaker performance than retailers had predicted when surveyed a month ago. Shops selling clothing and footwear have been experiencing the most difficult trading conditions, while department stores and furniture and carpet outlets reported the strongest sales growth.
The employers’ organisation said the survey had been conducted between 26 February and 13 March, pre-dating the arctic weather that has kept consumers away from the shops in the past week.
RSA, Britain’s biggest commercial insurer, warned that the cold snap could be costing the economy about £500m a day. The insurer estimated that the cost of lost output would be £473m a day based on “conservative” estimates that a third of the workforce was being disrupted rising to £629m a day in the event of a repeat of the big freeze in January 2010 when 44% of employees failed to make it in to work.
Money | guardian.co.uk
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