High street sales continue to grow strongly in year to June 2012, says CBI

Retailers reported a further improvement in the growth of sales volumes and orders in the year to June 2012, although sales remained below the levels expected for the time of year, the CBI said today (Wednesday).

In the CBI’s latest monthly Distributive Trades Survey, covering the first two weeks in June, 58% of retailers reported sales volumes were up on a year ago, and 17% stated sales had fallen. The resulting rounded balance of +42% was stronger than retailers had expected (+25%) and was the fastest growth reported since December 2010 (+56%), said researchers.

Firms also reported better than expected growth in orders (+23% compared to +18%), with the survey balance once again the highest since December 2010 (+52%).

Retailers expect strong increases in both sales and order volumes in the year to July (+32% and +21% respectively), although the pace of growth is expected to ease somewhat, relative to June.

However, retailers still considered the volume of sales to be below average for the time of year (-10%). Stock levels fell back relative to expected demand (+11%), although to a lesser degree than had been expected (+4%).

Most retail sub-sectors reported an improvement in year-on-year sales growth. Grocers recorded their highest balance (+85%) since February 2010 (+88%), and clothing saw annual sales growth for the third consecutive month (+69%). A balance of +96% of footwear and leather retailers saw an increase in sales – this was the highest survey balance on record, but the rate of growth was similar to those seen at the end of 2010 (+95%).

Judith McKenna, chair of the CBI Distributive Trades Panel and Asda chief operating officer, said: “Retailers have continued to report strong growth in both their sales and orders. The Jubilee provided a much-needed boost to our high streets with many families and communities making the most of the Bank Holiday and coming together to celebrate.

“However, it is notable sales were still considered to be below par for the time of year. Weak consumer confidence and uncertainty over the economic outlook are still putting a brake on consumer spending across the whole retail sector.”

Among wholesalers, 33% reported a rise in the volume of sales, while 32% saw a fall, meaning sales volumes were broadly flat on a year ago (+16%). This followed consistent sales growth since December 2011.

Motor traders saw a third consecutive fall in their volume of sales (-5%), but expect growth in the month ahead (+38%).