High street sales slumped at the fastest rate for early spring in at least five years, as freezing conditions caused by the “beast from the east” sweeping in from Siberia kept people away from the shops.
The CBI’s survey found a sharp decline in sales volumes triggered by the poor weather, with 40% of retailers reporting that sales volumes were down in March compared with the same month a year ago.
Sales for the time of year have not been this weak since April 2013, according to the survey of 109 firms, while online sales figures were also the weakest in almost a decade as customers were reluctant to place orders for fear deliveries would be delayed.
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The bleak snapshot of high street trading provided by the CBI showed department stores, shops selling recreational goods and furniture retailers experienced some of the biggest falls in sales. Grocers, footwear shops, and hardware and DIY outlets had a better month, reporting positive sales growth.
Ben Jones, the CBI principal economist, said retailers were suffering as consumers find themselves squeezed by weak wage growth and rising inflation, which was triggered by the drop in the value of the pound following the Brexit vote. “The lengthy cold snap earlier this month has heaped added pressure on retailers,” he said.
“Freezing conditions and transport disruption caused people to avoid the high street.”
Although telecoms firms saw record internet traffic during the month as many people were forced to work from home, there was no boon for online retailers as consumers feared deliveries could get held up because of the snow. Wholesalers and motor traders also felt the chill from the poor weather, with both sectors reporting noticeable slowdowns in sales growth in the year to March.
Despite the poor month, the CBI survey shows most retailers expect conditions to get better over the coming months as the weather improves.
However, the slowdown for March is likely to compound fears among economists that the beast from the east will have caused economic activity to slow in the first three months of the year.
Gridlocked motorways, empty restaurants and idle diggers seen across Britain are thought to have cost the economy at least £1bn a day and could halve GDP growth in the first quarter.