Retail sales in the UK continued their downward spiral in March, marking six consecutive months of decline, according to the latest CBI distributive trades survey. Sales volumes fell sharply, with a weighted balance of minus 41 percent, a significant drop from minus 23 percent in February. Retailers remain pessimistic, expecting further contraction in April, albeit at a slower pace (minus 30 percent).

Online sales mirrored this trend, falling by minus 27 percent, and wholesale volumes also dropped more steeply, suggesting broad-based weakness across the distribution sector. Consumer demand remains well below seasonal norms, likely dampened by global trade tensions and uncertainty surrounding the Autumn Budget. Retail orders to suppliers and motor trade sales followed similar declining trajectories, underlining a fragile supply chain and tepid confidence in future demand.

The slump was attributed to waning consumer and business confidence, and robust policy support was called for in the upcoming Spring Statement. Proposals include reforming business rates and strengthening investment schemes like the Growth Guarantee Scheme. While short-term prospects remain subdued, targeted fiscal intervention could be pivotal in revitalising demand and restoring momentum to a struggling retail sector.

The Confederation of British Industry (CBI) produces a monthly survey (and a more detailed quarterly report) analysing the performance of the UK retail, wholesale and motor trade sector. Volume sales, orders on suppliers, sales for the time of year and stocks are all covered and the quarterly survey also covers imports, selling prices, numbers employed, investment and business situation. Financial markets tend to concentrate on the CBI's annual sales growth measure as a leading indicator of the official retail sales report.

This survey is a leading indicator of consumer spending because retailer and wholesaler sales are directly influenced by consumer buying levels. The monthly update provides a vital update on volume of sales, orders and stocks. Like the industrial survey, it carries significant weight in the formulation of economic policy at the Bank of England and within government as a highly respected barometer of high street trade. It is considered to be an advance indicator of retail sales although it is not well correlated with the official data on a monthly basis.