RETAIL SALES SLOW BUT GROWTH OUTLOOK BRIGHT – CBI
Retail sales volumes slowed somewhat in the 12 months up to June from their strong rally in May, according to the CBI’s latest monthly Distributive Trades Survey.
The survey of 131 firms showed the volume of retail sales rose at a slightly slower pace than anticipated in the year to June. But sales remained a little above average for the time of year and growth is expected to improve next month.
Growth in orders placed upon suppliers was also lower than expected but is expected to pick up pace again in July.
The slowdown in headline sales growth from last month was mostly driven by the grocers sector, where volumes were flat in the year to June following May’s strong showing.
Most other retail sub-sectors reported growth in sales volumes, with the clothing sector and ‘other normal goods’, which includes flowers, watches and jewellery, some of the best performing.
Internet sales volumes rose again in the year to June. However, the rate of growth eased off slightly on the previous month.
Wholesaling and motor trades saw robust growth, with the former exceeding expectations for sales volumes, and expected to accelerate in July.
Barry Williams, CBI Distributive Trades Survey Chairman and Asda’s Chief Customer Officer, said:
“Summer is a time of optimism for retailers and this year is no different. Even though growth slowed slightly this month, retailers are not letting that subdue their hopes for the season.
“Low inflation – expected to stay below 1% throughout this year – has given customers more discretionary income. The power of the pound in their pocket is going further and shoppers are spending more on treats, like flowers and jewellery, as well as on activities with their families.”
- 44% of retail sector respondents said volumes were up on a year ago, and 15% said they were down, giving a balance of +29%. This shows a slowdown in sales growth on the previous month (+51%) and was below expectations (+58%)
- Retailers expect sales volumes to grow slightly next month (+33%), with 38% expecting them to rise and 5% to fall
- Most sub-sectors saw growth in sales volumes, notably other normal goods (+82%), furniture & carpets (+63%), clothing (+57%) and chemists (+47%). But footwear & leather saw a fall in sales volumes on a year ago (-36%), alongside non-store goods (-50%) – the lowest since January 2014. Grocers sales were flat (0%), following a solid rise in May (+50%)
- The volume of orders placed upon suppliers grew (+15%), but was well below expectations (+41%). Firms anticipate a pick-up in growth next month (+31%)
- Stocks relative to expected demand (+21%) were ahead of expectations
- Volumes of sales for the time of year remained a little above average in June (+6%)
- The volume of internet sales slowed slightly (+32%) disappointing expectations (+49%), but with growth expected to pick up next month (+49%).
53% of wholesalers reported sales volumes to be up on last year and 21% said they were down, giving a balance of +32%.
55% of motor traders reported sales volumes to be up on last year and 18% said they were down, leaving a balance of +37%.
Notes to editors: