UK retailers are at their most pessimistic since the financial crisis as sales of non-essential goods plummet due to coronavirus containment measures, a survey has shown.
However, grocers and other food firms have seen a surge in demand as Brits stockpile during the coronavirus lockdown, the CBI said today.
This divergence of fortunes for Britain’s retailers meant overall retail sales were flat in the year to March, according to the CBI’s distributive trades survey. Yet survey respondents said they expect coronavirus to make sales fall sharply.
Ben Jones, CBI Principal Economist, said: “These are extraordinary times for the retail sector. Grocers are seeing a temporary increase in demand because of coronavirus. But many other retailers are seriously suffering.”
Despite a raft of measures from the government to support retailers, the sector was at its gloomiest since April 2009 in March.
The UK retail sector was already in a relatively weak position, having suffered a torrid 2019 due to Brexit uncertainty. In March, orders placed upon suppliers fell for the eleventh consecutive month, despite a strong rise in orders placed by grocers.
Yet the food and drink sector benefited from stockpiling as the country prepares for what could be a long period of lockdown.
Prime Minister Boris Johnson on Friday ordered Britons to stay at home except for visits to the shops to buy food and medicine and for exercise.
Food and drink wholesalers reported particularly strong retail sales growth in the year to March, with further rapid growth expected next month, the CBI said.
With demand for a broad range of goods set to tumble, the government has launched various schemes to help business-owners, including the suspension of business rates and the offer of cash grants.
The Bank of England has worked with the government to stimulate lending to small and medium-sized businesses while cutting interest rates.
Jones said he welcomed the steps but said the next hurdle is making sure businesses take advantage of the help.
“What’s needed now is clarity over the support available to firms and fast action to ensure measures announced last week are accessible to businesses of all sizes,” he said.