April/May/June 2020

Stockpiling props up retail sector

Overall retail sales were flat in the year to March, but this masked a sharp divergence between sectors, according to the latest monthly CBI Distributive Trends Survey (conducted between 26 February 2020 and 13 March 2020). Grocers reported exceptionally strong growth in sales volumes in the year to March, as did specialist food and drink firms. However, most other sectors reported sharp falls in sales volumes.

The results of the survey suggest that while households are stockpiling groceries in response to the spread of the Coronavirus and the introduction of social distancing, they are putting off purchases of non-essential items. In line with this, non-store retailers reported a fall in sales volumes, while internet sales growth slowed to a below-average pace. Retail sales are expected to fall sharply in the year to April, with retailers more pessimistic than at any time since April 2009.

Orders placed upon suppliers fell for the eleventh consecutive month, despite a strong rise in orders placed by grocers. Orders are expected to fall across most sectors in the year to April (including grocers), with expectations the weakest since April 2009. Sales were seen as poor for the time of year, but to a lesser extent than last month. Next month, sales are expected to be poor for the time of year – to the greatest extent since February 2009.

Ben Jones, CBI Principal Economist, said: “Grocers are seeing a temporary increase in demand because of Coronavirus, but many other retailers are seriously suffering as households put off non-essential purchases and social distancing keeps people away from the High Street. The Government have already taken substantial steps to support business during this period. What’s needed now is clarity over the support available to firms and fast action to ensure measures are accessible to businesses of all sizes.”