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Last Updated: Wednesday, 30 March, 2005, 12:28 GMT 13:28 UK
Spending slowdown hits retailers
Consumers kept their wallets at home in the run up to Easter
UK retail sales fell at their fastest pace for six months in March as bad weather and jitters ahead of the recent Budget hit trading, the CBI says.

In its latest distributive trades survey 31% of retailers said sales volumes were up in March, while 40% said they were down on the year.

The balance of - 9% is a sharp reversal from the + 2% balance seen last month.

Despite forecasts for a modest rebound, the CBI said sales for the time of year were their worst since November 1992.

Sales slump

High utility and fuel bills also squeezed consumers' disposable incomes, the business body said.

For the third month in a row volumes failed to meet expectations
Doug Godden, CBI

Demand for furniture and carpets was particularly bad over the month, while sales of hardware, china, pharmaceuticals and specialist foods were also weaker. The cold weather hit DIY stores.

Clothing retailers, however, enjoyed healthy sales while more expensive items such as washing machines also sold well.

Nonetheless, the CBI said there was no doubt that underlying sales growth has slowed since the turn over the year, another sign that consumers have taken notice of five interest rates increases over the last year-and-a-half.

"Retailers had been expecting stronger sales growth in March but for the third month in a row volumes failed to meet expectations," said the CBI's head of economic analysis, Doug Godden.

"Some of this poor performance might be attributed to the wintry weather at the start of March and a reluctance for consumer to spend ahead of the Budget."

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