April CBI data show that the worst cost-of-living cuts since the 1950s are beginning to affect consumer spending.
According to an industry snapshot, retail sales in Britain fell sharply in April as stranded households cut their spending amid a sharp rise in the cost of living.
Data from the Confederation of British Industry (CBI) showed that retailers saw a sharp drop in sales during the month as consumers faced sharply higher gas and electricity bills, record fuel prices and a sharp increase in weekly shopping costs.
In a sign that the worst decline in household disposable income since the 1950s is beginning to affect consumer spending, the data showed a particularly sharp drop in sales of clothing and specialty food and beverage stores.
Auto traders said sales were poor in April even though they were good in March, while retailers warned that sales are likely to continue to decline in May, albeit at a more modest pace.
Compiled from a survey of 108 companies, including 51 retailers, conducted immediately after Rishi Sunak’s spring announcement, the CBI survey showed that sales volumes in April were considered low for this time of year.
The overall retail sales balance in the lobbying group’s survey of wholesale sales fell to -35 in April from +9 in March, well below the average of -3 expected in the Reuters poll of economists.
The CBI said the slight drop in sales was due to consumers again spending more on services such as meals at pubs and restaurants and vacation trips after Covid restrictions were eased. Retail sales rose sharply in the isolation, while other spending opportunities were limited.