Retail sales fall at sharpest rate since Covid lockdown as High Street crisis deepens

Britain’s struggling retailers are suffering their worst month since the outbreak of the Covid-19 pandemic as war in the Middle East takes its toll.

In a bleak report that will fuel fears over the health of the UK economy, the Confederation of British Industry (CBI) said sales fell this month at the sharpest pace since April 2020.

That was the month after the UK was plunged into lockdown during the coronavirus crisis, leaving all but essential services closed in a devastating blow to the High Street.

The CBI said retailers expect to see sales decline ‘at a broadly similar pace’ next month.

The report came as separate figures showed the UK’s private sector has slowed to a crawl, growing at the weakest pace for six months, with manufacturers facing the steepest increase in costs since the aftermath of Black Wednesday in 1992.

The reports will fuel fears that Britain’s economy is struggling to withstand the energy price shock emanating from the Iran war.

Martin Sartorius, lead economist at the CBI, said: ‘Momentum in the retail sector remained poor in March, with annual sales volumes falling sharply and no signs of an imminent recovery. Retailers report that weak economic conditions continue to weigh on household spending, with subdued activity also evident across the broader distribution sector.’

The CBI sounded the alarm over the impact of Labour’s new package of rights for workers at a time of rising unemployment.

Unemployment is jumped to a five-year high of 5.2 per cent under Labour while youth unemployment is at an 11-year high – sparking warnings of a ‘lost generation’.

Sartorius said: ‘Steps taken by the government last week to address youth unemployment challenges – including launching foundation apprenticeships in hospitality and retail – are welcome moves to mitigate rising employment costs.

‘However, more must be done to lower the cost of doing business, including securing workable outcomes on the Employment Rights Act and delivering a simpler, more competitive tax system.

‘The conflict in the Middle East – which risks fuelling price pressures and squeezing household budgets – underscores the need for the government to take further action to lower the cost of doing business for distribution firms.’