UK retail sales are down and it seems the slump is worse than economists had predicted. According to the Confederation of British Industry (CBI), retail sales will hit a five-month low in February.
Although volumes continued to strengthen in the first half of February, the pace of growth slowed down once again. CBI found that 37 percent of retailers saw an increase in their volume in early 2013, while 29 percent reported a decline.
The resulting balance of 8 percent was the lowest figure since September 2012. It was also the third consecutive month in which the pace of growth had slowed. Economists expected growth to drop to 16 percent, down from 17 in January. They also expected the volume of orders to remain flat, but they fell 19 percent, the lowest figure since November 2011.
However, it is not all doom and gloom. CBI reckons the business situation is actually improving. The business situation balance rose to +12, the best result since August 2011. Some retail sub-sectors also did quite well, such as clothing, furniture and none-store goods, which includes online and mail order sales. In fact, non-store sales were up 70 percent.
“We all know trading is tough, and the bad weather hasn’t exactly been encouraging shoppers to hit the high street lately,” said Barry Williams, Chairman of the CBI Distributive Trades Survey.
So, it appears that strong non-store sales had a lot to do with horrid weather, and the weather also contributed to the sharp decline in retail footfall last month.