Retail sales grew strongly in the year to January, slightly exceeding expectations, according to the CBI’s latest monthly Distributive Trades Survey.
The survey of 127 firms showed that whilst sales volumes grew at a slower pace than in the previous month – which benefitted from bumper Black Friday sales – the rate of growth remained healthy, and volumes were well above average for the time of year. Firm growth is anticipated again in the year to February.
Among the retail sub-sectors, growth was generally broad-based. Clothing reported the strongest rise in sales since February 2013, and robust growth was also seen from grocers, furniture & carpets retailers and other normal goods, such as jewellery and second-hand goods.
Internet sales volumes rose firmly again in the year to January, though the rate of growth eased off slightly for the second month running.
Wholesale sector sales continued to grow at a healthy pace, and are expected to rise further in the year to February, whilst motor traders saw more modest growth.
Rain Newton-Smith, CBI director of economics, said: “After the sales bonanza of Black Friday cooled down, retailers saw solid footfall through the doors over the Christmas trading period, leading to further robust growth in sales in the New Year. However, under the spotlight of strong competition, some retailers are feeling the heat on their margins.
“Falling oil prices and low inflation mean consumers have a bit more money in their pockets. We expect to see this translate into strong sales growth in the months ahead.”
- 50% of retailers said that sales volumes were up in January on a year ago, whilst 10% said they were down, giving a rounded balance of +39%. This was above expectations (+35%)
- 46% of retailers expect sales volumes to grow over the next month, with 4% expecting them to decrease, giving a balance of +42%
- 25% of retailers placed more orders with suppliers than they did a year ago, and 23% placed fewer, giving a balance of +2%. Whilst below expectations (+15%), orders are expected to grow further next month (balance of +12%)
- The volume of internet sales rose (+49%) in the year to January, broadly in line with the long-run average (+52%)
- Sales volumes grew particularly strongly in clothing (+91%), furniture & carpets (+77%), other normal goods (+52%), and grocers (+50%)
- Sales volumes decreased in recreational goods (-33%), hardware & DIY (-19%), specialist food & drink (-13%) and footwear & leather (-6%)
- 64% of wholesalers reported sales volumes to be up on last year, and 8% said they were down, giving a rounded balance of +56%
- The other goods sector had the strongest showing (90%), rising at the strongest pace since November 2012 (+100%), and sales growth was broad based across sub-sectors
- 48% of motor traders reported that sales volumes were up on a year ago, while 28% said they were down, giving a balance of +20%, which was lower than expected (+35%)