Retail sales growth slows in January, latest CBI Distributive Trades Survey reveals

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Retail sales growth slowed in the year to January 2013, according to the CBI’s first monthly Distributive Trades Survey of  the New Year.

The survey, covering the first fortnight of January 2013, shows 41% of retailers reported increased sales volumes compared to a year ago and 24% reported a fall. The resulting balance of +17%, although better than expected (+10%), shows a similar picture to December (+19%) but falls short of the robust growth in October (+30%) and November last year (+33%).

Sales volumes in January were broadly in line with the average for the time of year (+1%) for the first time since April 2012 (0%).

But retailers expect sales to dip slightly below seasonal norms once again in February (-7%) and are predicting year-on-year sales growth to slow slightly further in the next month (+13%).

Judith McKenna, chair of the CBI Distributive Trades Panel and Asda chief operating officer, said: “Despite mixed news from the high street over the last few weeks, strong sales growth in the grocery sector has added a touch of sparkle to overall retail sales.

“However, we are far from out of the woods. With tough trading conditions and subdued consumer spending adding to the uncertain economic picture, retailers will continue to face tough market conditions in the coming months.”

The survey showed retailers’ orders with suppliers rising on a year ago for a fifth consecutive month (+15%) but orders are expected to plateau in February (+1%). Stock levels were slightly more than adequate relative to expected demand (+5%), falling back for the second month running.

By sector, the survey shows that grocers recorded their ninth successive month of rising year-on-year sales (+41%) – holding up total retail sales growth, and partially compensating for falling volumes and weakening growth rates elsewhere.

Clothing sales growth (+13%) was at its lowest level since last August, and footwear and leather sales fell slightly on a year ago, for the third month running (-6%). Specialist food and drink sales (-32%) fell at their fastest since last October and sales of big-ticket household goods continued to fall (-43%).

Other survey figures showed wholesalers reporting broadly flat sales on a year ago (-3%), down on expected growth (+12%). Food and drink sales continued to rise on a year ago (+34%) but this was offset by falling sales in other sectors.

The motor traders sector also disappointed, with reported sales volumes down on a year ago (-11%), falling short of expectations (+18%).