Retail sales grew strongly in the year to February, beating expectations, and at the fastest pace since June 2012, according to the CBI’s latest quarterly Distributive Trades Survey.
The survey of 120 firms showed that sales have grown for the ninth consecutive month, while retailers’ investment intentions for the year ahead were at their highest since November 2010.Sales volumes were strong once again among grocers, clothing and furniture & carpet retailers, but specialist food & drink recorded a fall in sales volumes for the second consecutive month. Sales were broadly in line for the time of year, while orders picked up, consistent with expectations, and firms anticipate they will strengthen again in the next month.
Internet sales volumes among retailers maintained robust growth in the year to February, although they are expected to slow somewhat next month.
Employment fell on a year ago for the first time in a year, with a further small fall expected next month. But retailers envisage their business situation improving over the next quarter. Meanwhile, growth in retail sales in the year to March is expected to moderate from this month’s strong pace, but should remain robust nonetheless.
Barry Williams, Asda Chief Merchandising Officer for Food, and Chair of the CBI Distributive Trades Survey Panel said:
“The high streets have kicked on once again this month, with growth the strongest since the summer of 2012.
“There is growth across many sectors, including grocers and clothing outlets, while investment intentions are at their highest for more than three years. Although we are by no means seeing a universally confident shopper, the positive indicators have perhaps given some people the urge to spend.
“Overall sales have been remarkably resilient in the face of disruption from the exceptional weather across the UK, which has badly affected many families and businesses.”
Wholesalers recorded solid growth in sales volumes in the year to February, while their investment intentions for the year ahead were at a record high. Motor traders saw strong sales growth, while optimism over the business situation for the quarter ahead was at its highest since 1994.
- 45% of respondents reported that sales volumes were up on a year ago, while 8% said they were down, giving a balance of +37%, the strongest since June 2012 (+42%) and easily beating expectations (+15%)
- Retailers expect sales volumes to grow at a robust pace next month (+28%), with 43% expecting them to rise and 15% to fall
- There was a broad-based increase in sales across many sub-sectors with grocers, clothing and furniture & carpets performing particularly strongly:
- Grocers’ sales grew at their strongest pace (+67%) since June 2012 (+85%)
- Retailers of furniture & carpets saw sales grow at their strongest pace (+88%) since September 2013 (+100%)
- The clothing sector bounced back from a disappointing January (-55%) with growth in sales volumes of +33%.
- The volume of stocks in relation to expected demand was +4%, the lowest level since September 2012 (+4%)
- 9% of retailers said that sales volumes were above average for the time of year, while 12% said they were below average, giving a balance of -3% – broadly in line with expectations (-4%)
- 31% placed more orders with suppliers than they did a year ago and 15% placed fewer, with the resulting balance of +16%, matching expectations.
- Employment in the retail sector fell slightly for the first time in a year (-4%).
- Retailers expect their overall business situation to improve over the next three months (+18%).
- Investment intentions for the year ahead (+17%) were their strongest since November 2010 (+28%).
42% of wholesalers reported sales volumes to be up on last year and 19% said they were down, giving a balance of +23%. Industrial materials (+100%) and building materials (+79%) had the strongest showings. Investment intentions for the year ahead (+49%) were at a record high.
69% of motor traders reported sales volumes to be up on last year and 0% said they were down, which, although robust, was below expectations (+91%). Motor traders believe their business situation will improve in the next quarter (+20%), the highest reading since February 1994 (+46%), while investment intentions for the year ahead (+37%) remained strong.