Retail sales growth accelerated in the year to December, with volumes rising at the fastest pace since September 2015, according to the CBI’s latest monthly Distributive Trades Survey.
The survey of 112 firms consisting of 53 retailers showed that sales volumes for the time of year were considered well above average, but growth is expected to slow somewhat in the year to January. Meanwhile, orders placed on suppliers rose at the fastest pace in over a year, but are expected to be broadly stable in January.
The growth of retail sales volumes was broad-based, with sales of clothing continuing to perform strongly and grocers reporting the best results since January 2016. Internet sales volumes continued to rise at a robust pace in the year to December, with the survey balance at its highest since November 2014.
Meanwhile, wholesaling reported the strongest volumes growth for almost a year-and-a-half in the year to December, with motor trades also seeing a healthy increase in sales volumes.
Ben Jones, CBI principal economist, said: “It’s encouraging to see retailers reporting another month of healthy sales growth leading up to the festive season, which rounds off a fairly solid quarter.
“While we still expect to see decent growth in the near term, the pressures on retail activity are likely to increase during 2017, as the impact of sterling’s depreciation feeds through.
“With higher inflation beginning to weigh on households’ purchasing power, consumption patterns are likely to shift, creating winners and losers across the retail landscape.”
- 51% of retailers said that sales volumes were up, whilst 16% said they were down, giving a balance of +35%.
- 26% of retailers said the volume of sales were above average for the time of year, with 5% saying they below average, giving a balance of +21%.
- 32% of retailers placed more orders with suppliers than they did a year ago, and 19% placed fewer, giving a rounded balance of +12%.
- 17% of retailers expect the volume of orders to increase in the year to January, with 19% expecting them to decrease, giving a balance of -2%.
- Most sub-sectors saw healthy growth in sales volumes, strong performances were reported in clothing (+82%), hardware & DIY (+67%), and non-store (66%) and other normal goods (+50%).
- Volumes of internet sales in the retail sector grew well above the long-run average (+66%), with expectations that they will slow somewhat in the year to January (+53%).
- 61% of wholesalers reported sales volumes to be up on last year and 12% said they were down, giving a strong balance of +49%.
- 47% of motor traders reported that sales volumes were up on a year ago, while 0% said they were down, giving a balance of +47, beating expectations of slightly slower growth (+24%).