RETAIL SALES GROWTH BOUNCES BACK – CBI
Retail sales recovered in the year to March after last month’s disappointing figures, according to the latest CBI monthly Distributive Trades survey.
The survey of 126 firms showed that after sales growth ground to a near halt in February, volumes grew solidly this month and are expected to grow at a broadly similar pace in April.
Sales growth for chemists reached a near 17-year high, while furniture and carpets businesses also reported decent growth. In contrast, sales were flat among grocers’ after falling last month, and they fell in footwear & leather. Internet sales growth eased for a fourth month running, although a stronger rise is expected next month.
Retail orders picked up in the year to March, following a dip last month.
Elsewhere, wholesale volumes grew briskly in the year to March, albeit slowing somewhat on the previous survey. Motor traders saw a more modest rise in sales over the year, with expectations of faster growth next month.
Rain Newton-Smith, CBI Director for Economics, said:
“Sales have recovered following a tough month in February for retailers, and we expect solid growth to continue through Easter.
“The outlook ahead is looking bright, with household incomes buoyed by zero inflation and improving pay packets, which will continue to encourage spending.
“However, the retail sector isn’t in the clear yet, with some companies, especially food retailers, still feeling the heat from stiff price competition.”
34% of respondents said volumes were up on a year ago, and 15% said they were down, giving a rounded balance of +18%: marking a pick-up in sales growth on the previous month (+1%), but still below expectations (+27%).
Retailers expect sales to continue rising next month, with a rounded balance of +21%, though expectations are the lowest since July last year.
Volume of sales for the time of year in March were broadly average (+1%), with 24% saying that they were good for the time of year, 23% saying that they were poor and 53% average.
Some sub-sectors reported notably strong sales growth, with chemists (+89%), seeing the fastest rise since 1998 (+92%), and furniture and carpets also growing robustly (+86%).
Grocers’ sales were flat (0%), with 20% saying that they were up, 20% down and 60% the same. This compares to the previous month, when they fell substantially (-20%). In addition, the non-store sector saw the fastest fall in sales since January last year (-17%) (12% up, 29% down and 59% the same)
Growth in internet sales continued to slow slightly (+38%), with 53% saying that they were up, 14% down and 33% the same. Growth was also below expectations (+55)
26% of respondents said the volume of orders placed upon suppliers were up on a year ago, and 16% said they were down, giving a rounded balance of +10% and growth is expected to slow next month (+4%).
Stocks relative to expected demand (+21) exceeded expectations. Stock adequacy is expected to remain at its current level in April (+23%).
50% of wholesalers reported sales volumes to be up on last year and 13% said they were down, giving a balance of +37%. Expectations for growth in April (+34%) are the lowest since August last year (+26%).
56% of motor traders reported sales volumes to be up on last year and 38% said they were down, leaving a rounded balance of +18%.
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. The survey of 126 firms was conducted between 26th February and 13th March, including 68 retailers, 49 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.