Cold weather caused retail sales volumes to drop more sharply than expected in March, with adverse elements keeping cash-strapped consumers away from shops.

The Confederation of British Industry’s distributive trades survey monthly sales balance is the difference between those retailers believing sales volumes are up and those reporting volumes are down. The measure improved to hit -16 last month from -18 in February. Although this was mildly encouraging, it was well south of retailers’ own forecasts suggesting a swifter up-tick to -5. Analysts were closer, suggesting the balance could rise to -13.

John Longworth of the CBI’s retail survey panel and executive director of Asda commented that, ‘the colder weather has kept spring on hold, putting the stops on people buying new clothes and venturing out of doors and on to the high street.’

Despite their over-optimism in the past three months, retailers are still gunning for an (April) improvement with the sales expectations balance at -7.

Key news amid major sector players involved Sainsbury’s, the UK’s third biggest supermarket, now in full recovery mode under chief Justin King. The FTSE 100 giant flagged up a better than expected sales hike for the January to March period, with like-for-like sales (stripping out new stores and excluding petrol) lifted 5.3 per cent, the fifth consecutive quarter of like-for-like sales growth.

Meanwhile Woolworths, led by chief executive Trevor Bish-Jones, unveiled a drop in annual profits from £54.9 million to £43.7 million, with competition on the high street continuing to bite. Intriguingly, Icelandic raider Baugur has built up a 10 per cent stake in Woolies, leading to recent bid speculation.