According to the latest CBI distributive trades survey, UK retail sales continued their downward trend in April, marking a seventh consecutive month of annual decline. While the pace of decline slowed (weighted balance of minus 8 percent, up from minus 41 percent in March), the reprieve appears temporary, with retailers bracing for a sharper drop in May (minus 33 percent).

Sales were still considered poor for the time of year, and expectations for May suggest worsening conditions. Notably, motor trade sales plunged (minus 50 percent), while wholesale volumes saw one of their steepest declines since 2020 (minus 33 percent). Meanwhile, online retail remained relatively stable (minus 1 percent), with a modest recovery anticipated in May (2 percent), reflecting shifting consumer habits. Retailers also cut back less aggressively on supplier orders in April, yet plan deeper reductions next month. Stock levels remain elevated above long-term averages, signalling weak demand.

Overall, while April's figures hint at a slight easing in decline, the retail sector remains in a fragile state. Persistent cost pressures, weak consumer confidence, and subdued seasonal performance indicate an industry still struggling to find its footing. The outlook for May suggests that the downward momentum could persist without more substantial demand-side stimulus or fiscal reassurance.

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.