Published
Mar 28, 2018
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CBI survey shows UK fashion retailers feeling the chill

Published
Mar 28, 2018

It looks like retailers could be in danger of being left with too much stock after March sales proved weak but stores kept on ordering, according to the latest CBI Distribution Trades Survey. And that could be a big problem for the fashion sector as its stores were among the weakest performers this month.


CBI


The CBI’s survey of 109 firms, consists of 53 retailers, and they said year-on-year sales volumes fell for the first time in March since October 2017, although the volume of orders placed with suppliers stayed “broadly unchanged,” which could explain the spate of Easter markdowns we’re seeing at the moment.

Only 32% of retailers said sales volumes were up in the year to March, while 40% said they were down, giving a balance of -8%.

And the CBI also said that growth in online retail sales slowed sharply in the year to March, with sales rising at the weakest pace since 2009. 

How reliable are the figures? Well, the survey is the earliest one we get and while it’s also sometimes the least reliable one, its early timing still makes it invaluable.

So what was the CBI’s core message? “Sales for the time of year were significantly below normal, and by the greatest extent since April 2013,” it said, underlining the overall weakness in UK retail at present.

It said sales volume growth in department stores saw a balance of -94% which means almost all of them were struggling during March. But while clothing stores were also on the negative side at -15%, at least footwear and leathergoods stores saw a +28% balance, which was the one bright spot in the report.

It seems spring clothing simply failed to hit the spot with consumers still reeling from colder-than-average temperatures. But it would be interesting to know what was selling on the shoes and leathergoods front given the success of this sector. Were Britons still buying boots or did the early sandals offer appeal to them? Or maybe it was all about the ongoing migration to athleisure with trainers the stars of the shoe world.

Looking ahead to next month, retailers expect sales volumes and orders placed with suppliers to grow, though at a fairly subdued pace, and internet sales are also expected to pick up slightly in the year to April, although growth is expected to remain far below average.

Ben Jones, CBI Principal Economist, said: “Against a backdrop of stagnating household incomes and weak consumer confidence, the lengthy cold snap earlier this month has heaped added pressure on retailers. 

“Freezing conditions and transport disruption caused people to avoid the High Street. With many forced to work from home, telecoms firms saw record internet traffic, yet online shopping slowed sharply given the potential for disrupted deliveries.”

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