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British Retail in Free-fall but the Stock Market Is Recovering

The latest figures show that retail businesses in the UK have equalled their most dramatic slump in recorded history. With many firms having to close their stores due to the coronavirus pandemic, sales figures for April plummeted.

Details of the Survey

The numbers were collated in a survey that was carried out by the CBI between 27 March and 15 April. They revealed that 71% of the country’s retailers had fewer sales in April when compared to the same month last year.

On the other hand, only 16% of these businesses enjoyed more sales in April 2020 than they did at the same time in 2019. The result is -55%, which is the same as the previous record that was set during the last financial crisis, in December of 2008.

Overall, the CBI points out that this is the steepest fall in sales since they began this survey in 1983. Of those retailers that have been negatively affected, two thirds of them said that covid-19 is negatively impacting on their domestic sales figures. Every sector of retail has been affected by the current crisis.

39% of these businesses have totally closed down during the lockdown, while 44% have reduced staff numbers on a temporary basis. 8% confirmed that they are going to have to make some job cuts on a permanent basis.

Among the most worrying signs, we can see that a massive 96% of British retailers are suffering cash flow issues. A third of those surveyed confirmed that they were having problems in getting hold of external finance, so it is no wonder that international debt collection has become so important.

Even those sectors that had a strong March saw their numbers collapse in April. The CBI report showed that grocers had a balance of -27% and specialist food and drink fell by 4%. It is suggested that the numbers for March were boosted by people stockpiling as the crisis began to take hold of the nation.

It Could Be the End of 2021 Before the UK Economy Recovers

The recent stock market surge has boosted hopes that the worst of the economic crisis may now be over. At the time of writing, the FTSE has just climbed to its highest mark in the last seven weeks, thanks to a 1.6% rise.

Shares remain volatile, and it is worth remembering that the last time it was its current level, the FTSE had its worst session in decades the following day. However, this is a sign of possible recovery that has encouraged people to look ahead to better times.

Yet, the National Institute for Economic and Social Research has reported that the UK economy might not fully recover until the end of 2021. They think that the country’s economy will have contracted by 30% by the time the lockdown ends.

They go on to suggest that the levels seen in the final quarter of 2019 might not be seen again until the fourth quarter of next year.