UK retailers reported a sharp decline in sales in February due to poor weather conditions, the Distributive Trades Survey results from the Confederation of British Industry showed on Tuesday.
The retail sales balance fell to -43 percent in February from -17 percent in January. However, the pace of decline was expected to ease next month as the balance rose to -17 percent.
A net 16 percent of retailer judged sales for the time of year to be “poor” compared to -15 percent in January. Next month’s sales are expected to fall short of seasonal norms to a lesser degree, with the balance rising to -9 percent.
CBI Lead Economist Martin Sartorius 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,” Sartorius added.
Retailers plan to reduce capital expenditure over the next twelve months to a slightly greater degree than in November. The corresponding balance declined to -46 percent from -42 percent in November.
Retail employment declined at the fastest pace since May 2023. The retail employment balance declined notably to -40 percent from -19 percent. Headcount was forecast to drop at a quicker pace with balance easing to -44 percent.
The retail selling prices balance dropped to 41 percent from 46 percent in November. Retailers anticipate selling price inflation to remain broadly unchanged next month.
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