CRUCIAL CHRISTMAS RUN-UP SEES STRONGEST RETAIL SALES GROWTH SINCE 1988 – CBI SURVEY

CRUCIAL CHRISTMAS RUN-UP SEES STRONGEST RETAIL SALES GROWTH SINCE 1988 – CBI SURVEY

CRUCIAL CHRISTMAS RUN-UP SEES STRONGEST RETAIL SALES GROWTH SINCE 1988 – CBI SURVEY

Grocers record fastest growth in more than two years

Retail sales growth accelerated at its fastest pace for almost 26 years. That’s according to the CBI’s latest monthly Distributive Trades Survey, which covers the crucial run-up to Christmas.

The survey of 122 firms, published today (Friday) covers the fortnight ending 11 December and includes the sales-boosting effects of Black Friday. Though sales are expected to rise more slowly in the year to January, robust growth is still anticipated resulting in the strongest growth in orders placed with suppliers for a year.

Grocers saw the strongest year-on-year sales growth of any part of retailing, recording the best figure for two and a half years. Furniture & Carpets and the Other Normal Goods sector (the category that includes jewellery, watches and flowers) were the other best performers.

After surging in November, internet sales growth slowed somewhat in the year to December, though it remained above average.

Barry Williams, CBI Distributive Trades Survey Chairman and Asda Chief Merchandising Officer for Food, said:

“The strongest sales growth for a quarter of a century is a big boost for retailers as they head towards the climax of the crucial pre-Christmas trading period.

“Black Friday price-cuts, embraced more widely by more UK retailers than ever, and discounting played an important part in helping sales, encouraging more customers into stores and online to buy more widely.

“But, shoppers may have caught the Christmas bug early and brought some of their spending forward. This has been a tough year for many retailers and parts of the sector are still struggling. Increasing disposable income from real wages growth, and falling fuel prices are giving retailers reasons for optimism but we’ll need to see in the New Year whether the upbeat mood takes hold.”

Key findings:

Retailers

71% of respondents reported sales volumes up on a year ago, while 9% said they were down, giving a rounded balance of +61%, well above the +38% that had been expected and the highest balance since January 1988 (+67%).

Sales volumes for the time of year were above average with 22% describing them as ‘good’ against 5% saying ‘poor’, giving a rounded balance of +16%.

Grocers reported the fastest year-on-year growth in sales volumes of any retail sub-sector. 83% said sales were up, 0% said they were down. The balance of +83% is the highest since June 2012 (+85%). Other Normal Goods (which includes watches, jewellery, flowers and plants) was the second fastest growing sub-sector (+79%) followed by Furniture & Carpets (+72%). Two sub-sectors saw sales fall on a year ago: Footwear & Leather (-73%) and Recreational Goods (-25%).

After surging in November, internet sales grew on a year ago again in December, but at a somewhat slower rate. 74% said internet sales were up, 14% said they were down. The rounded balance of +59% is the third highest of the year, but down on the +72% last month.

Retailers expect overall sales volumes to grow again next month, albeit at a slightly slower pace (rounded +35%), with 49% expecting them to rise and 13% to fall.

Having slowed sharply in the year to November, the volume of orders placed upon suppliers bounced back. At +24%, it was slightly above expectations (+20%) but retailers predict growth will slow in the year to January (+15%).

Wholesalers

60% of wholesalers reported sales volumes to be up on last year and 7% said they were down, giving a rounded balance of +54%. Sales volumes for building materials again rose at the strongest pace on a year ago (+95%), but the Food & Drink sector also performing strongly, at +53%.

Motor traders

51% of motor traders reported sales volumes up on last year and 12% said they were down, leaving a balance of +39%. That is much better than the stagnation that had been expected (-1%). Motor traders believe their volume of sales will continue to grow at a slightly slower pace in the year to January (+35%).

19 December 2014

Notes to editors:

1. Firms responding to the Distributive Trades Survey (DTS) are responsible for a third of employment in retailing. The survey includes measures of sales activity across the distributive trades. It was first introduced in 1983 and the retail results form the UK component of the EC survey of retail trades.

2. This survey was conducted between 26 November and 11 December. 122 firms took part, of which 57 were retailers, 56 were wholesalers and 9 motor traders.

3. A balance is the difference between the percentage of retailers reporting an increase and those reporting a decrease.

4. Across the UK, the CBI speaks on behalf of 190,000 businesses of all sizes and sectors which together employ nearly 7 million people, about one third of the private sector-employed workforce. With offices in the UK as well as representation in Brussels, Washington, Beijing and Delhi, the CBI communicates the British business voice around the world.

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