UK retail sales slump as soaring energy prices hit households

theguardian.com:

Retail sales in the UK have slumped in April as hard-pressed households reined in their spending amid the soaring cost of living, according to an industry snapshot.

The figures from the Confederation of British Industry (CBI) found retailers experienced a rapid decline in sales volumes, in a month when consumers faced soaring gas and electricity bills, record fuel prices and a sharp increase in the cost of the weekly shop.

In a sign that the worst squeeze for household disposable income since the 1950s is starting to affect consumer spending, the data showed a particularly sharp fall for clothing and specialist food and drink shops.

Motor traders said sales were poor in April, having been good in March, while retailers warned that sales volumes were likely to continue declining in May, albeit at a more modest pace.

Compiled from a survey of 108 companies, including 51 retailers, in the weeks immediately after Rishi Sunak’s spring statement, the CBI survey showed that sales volumes were considered to be poor for the time of year in April.

The headline retail sales balance on the lobby group’s distributive trades survey fell to -35 in April from +9 in March, significantly below the average of -3 expected in a Reuters poll of economists.

The CBI said some of the drop in sales reflected consumers switching back to spending more on services – such as eating out in pubs and restaurants and travelling on holiday – after the easing of Covid restrictions. Retail sales had soared in lockdown while other opportunities to spend were limited.

However, it also warned that soaring prices were hitting consumers’ spending power. Households faced a record energy bill increase of 54% at the start of April, in a month when petrol and diesel rose