UK retailers suffer their worst month in two years

UK retailers suffer their worst month in two years

Britain's retailers had their toughest month in more than two years in April as the credit crunch, an early Easter and poor spring weather kept shoppers away from the high street, the CBI said today.

More than half the stores surveyed in the monthly snapshot of spending from the employers' organisation said trade was down on a year earlier - with outlets selling household goods particularly hard hit by the downturn in the property market.

Ian McCafferty, the CBI's chief economic adviser, said: "There is no doubt that consumers are tightening their belts as the mood about the economy and its outlook worsens. The trend in recent months has been one of slowing growth and now we've seen a fall in sales volumes, particularly so for goods related to the housing market."

The report showed that 52% of retailers said sales volumes were down on a year ago compared with25% who said they were up. The rounded balance of -26 points was the weakest since November 2005, with May expected to be another tough month.

The CBI said it was no surprise that retailers considered business to be poor for the time of year, with the balance of -38 points the weakest since November 1992 - when Britain was at the tail end of recession and the pound had just been forced out of the European exchange rate mechanism.

Stores selling durable household goods recorded the weakest sales balance (-84), but there was also falling demand for hardware, china & DIY sales (-59),.....continued below

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and furniture & carpets (-15). Despite mid-season sales, clothing was also down, although shoes and leather goods bucked the trend were a balance of +37 points. The food sector, which has previously held up while the rest of high street spending has come under pressure recordded its lowest balance (+3) since November 2006.

McCafferty said that the report was not quite as weak as it looked. "The survey needs to be seen in the context of the timing of Easter this year and the poor weather, which have further dampened sales this month. Nevertheless trading conditions are challenging for retailers and sales are expected to fall again in May, albeit at a slower rate."

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