Retail sales growth was broadly steady over the year to January, beating retailers’ expectations for a slight slowdown, according to the CBI’s latest monthly Distributive Trends Survey.
The survey of 126 companies showed that even though sales were considered to be well above average for the time of year, orders placed upon suppliers fell over the year at the fastest pace since May 2013. Sales growth is predicted to slow somewhat next month, and orders are set to continue falling moderately.
Within retail, grocers signalled another month of steady growth in sales volumes, but clothing sales fell over the year to January after reporting strong growth for nine consecutive months.
Elsewhere, growth in the volume of internet sales slowed in the year to January, with the survey balance falling below the long-run average. The volume of internet sales is set to pick up slightly in February.
Meanwhile, both wholesaling and motor trades also reported slower sales growth in in the year to January with volumes set to be flat in both sectors next month.
CBI director of economics, Rain Newton-Smith, said: “Retailers have had a steady start to the year through the January sales period.
“However with competition remaining fierce and persistent price deflation in the sector, it’s not surprising the outlook for retailers in February looks subdued.
“Mild weather looks to have hit clothing sales, but current low oil prices continue to support consumer spending.
“Retailers will be looking to the Budget for decisive action to reform the cumbersome and outdated business rate system.”
- 41% of retailers said that sales volumes were up in January on a year ago, whilst 25% said they were down, giving a balance of +16%. This was a little lower than the previous month (+19%), but above expectations (+9%)
- 30% of retailers reported sales volumes to be good for the time of year, with 14% reporting them to be poor, giving a balance of +16%.
- 20% of retailers placed more orders with suppliers than they did a year ago, and 32% placed fewer, giving a rounded balance of -13%. Orders are set to fall again next month (-10%).
- A number of sub-sectors saw healthy growth in sales volumes: strong performances were reported in the non-specialised sector – which includes department stores (+52%), grocers (+24%) and footwear and leather (+42%).
- Growth in internet sales volumes in the retail sector slowed (+27%), falling below the long run survey average (+50%).
- 34% of wholesalers reported sales volumes to be up on last year and 26% said they were down, giving a balance of +8%. Wholesalers expect sales volumes to be flat in February 2016 (0%).
- 25% of motor traders reported that sales volumes were up on a year ago, while none said they were down, giving a balance of +25%. Sales volumes are set to be broadly flat in February (+3%) – the weakest expectation since December 2014.