[LONDON] British retail sales growth almost ground to a halt in February as supermarkets and department stores reported much lower sales, an industry survey showed on Monday.
The Confederation of British Industry's retail sales balance slumped to +1 from +39 in January, far below economists'forecasts of +34 and the lowest reading since November 2013.
Retailers also cut orders with suppliers at the fastest pace since May 2013, and over the next three months they expect to reduce staff at the sharpest rate in more than five years. "After a strong start to the year, retailers were disappointed by the unexpected halt in sales growth," said Rain Newton-Smith, director of economics at the CBI. "In particular, continually heavy discounting in the grocers sector seems to be weighing on activity." Shoe shops also reported a poor February but sales were strong for chemists and firms selling what the CBI called "cultural goods".
Sales expectations for March also fell sharply to +27 from +42 in February, though Newton-Smith was still relatively upbeat about the sector. "Looking ahead, the outlook for the retail sector is fairly positive, with the boost to household incomes from falling inflation likely to support spending. Indeed, firms remain upbeat about the businesses situation over the coming quarter."
Official data on Friday showed retail sales fell 0.3 per cent on the month in January but rose 5.4 per cent on the year.