The survey found retail sales volumes declined at a weighted balance of -43 per cent in February, compared with -17 per cent in January. Although sales are expected to fall again next month, the pace of decline is forecast to slow to -17 per cent.
Retailers judged sales for the time of year to be “poor” (-16 per cent), with next month expected to remain below seasonal norms (-9 per cent). Overall sentiment deteriorated markedly, with business confidence falling at a weighted balance of -34 per cent, among the steepest declines in 17 years.
UK retail sales volumes fell sharply in February, with the CBI reporting a -43 per cent weighted balance, extending weakness seen since mid-2023.
Sentiment remained among the weakest in 17 years as employment and capital expenditure declined.
While wholesale and motor trades contracted, online sales rebounded strongly, offering limited relief amid soft demand and rising costs.
Employment in the sector contracted at the fastest rate since May 2023 (-40 per cent), and headcount is projected to fall further next month (-44 per cent). Retailers also signalled plans to cut capital expenditure over the next 12 months (-46 per cent), well below the long-run average.
Retail selling prices rose in line with the long-run average (+41 per cent), and are expected to remain broadly unchanged next month.
Total distribution sales volumes declined at a faster pace (-40 per cent), while wholesale sales fell more moderately (-36 per cent). Motor trades recorded a sharper contraction (-47 per cent). In contrast, online retail sales rebounded strongly, rising at the fastest rate since April 2021 (+43 per cent).
Martin Sartorius, lead economist, CBI, said: “Retail sales volumes fell at a sharp pace in the year to February, with some firms reporting that the wet weather discouraged shoppers from visiting stores. Soft demand conditions and elevated costs have continued to feed through to gloomy sentiment in the retail and broader distribution sector, prompting many firms to scale back investment plans and headcount.
“The Spring Forecast represents an important milestone for the government to build momentum behind its growth mission. Firms will be looking for the Chancellor to set out how the government plans to mitigate the impact of rising employment costs in the distribution sector, particularly given its vital role in providing first jobs for young people.”
Fibre2Fashion News Desk (JP)
