• Retail sales continue to disappoint, says CBI

    High-Street

    Latest figures from the CBI will do nothing to alleviate High Street retailers’ concerns, with the volume of sales flat in the year to April.

    The survey of 100 firms showed that, in the year to April, retail sales volumes were broadly unchanged. Sales were below average for the time of year for the second month in a row, albeit at to a lesser extent than in the year to March. Meanwhile, orders placed on suppliers fell slightly, but are expected to pick up again in the year to May.

    Within the retail sector, falls in sales volumes in the clothing, footwear & leather, non-store, and furniture & carpets sub-sectors were offset by sales growth among grocers, hardware & DIY, and recreational goods stores.

    Looking ahead to May, retailers expect sales and orders with suppliers to grow at around average pace.

    Year-on-year retail internet sales growth picked up in April after having risen at the slowest pace since 2009 in the year to March. Retailers expect a further acceleration in internet sales growth in the year to May.

    Meanwhile, wholesalers saw a pick-up in sales volumes growth in the year to April, while motor traders reported a fall in sales volumes (against expectations of continued growth).

    Looking at economic growth more broadly, momentum is expected to remain tepid through this year, with the economy growing at a similar pace to last year.

    Anna Leach, CBI Head of Economic Intelligence, said: “Sales have continued to disappoint in April, after falling in March. But expectations for next month are looking a little healthier.

    “It’s no secret that UK High Streets have endured tough trading conditions in recent months, with some big names closing or cutting back. Much of this reflects ongoing structural changes in the sector as well as the continued squeeze on households’ real incomes. While conditions have improved for households recently – with real wage growth inching into positive territory – we expect further gains in living standards to remain modest. So the pressure looks set to stay on retailers for the time being.”

    KEY FINDINGS
    Retailers:
    31% of retailers said that sales volumes were up in April on a year ago, whilst 33% said they were down, giving a balance of -2%. This undershot healthier expectations (+16%)
    33% of respondents expect sales volumes to increase in May on a year ago with 8% expecting a decrease, giving a solid balance of +25%
    30% of retailers placed more orders with suppliers than they did a year ago, whilst 35% placed fewer orders, giving a balance of -5%.
    23% of retailers reported that their volume of sales for the time of year were good, whilst 32% said they were poor, giving a balance of -9%
    Internet sales volumes growth accelerated in the year to April (+36%), marking a significant improvement from last month (+11%). Internet sales growth is expected to pick up further in the year to May (+50%)
    Sales volumes expanded in grocers (+29%), hardware & DIY (+33%) and recreational goods (+64%). Meanwhile, sales volumes decreased in clothing (-43%), footwear & leather (-83%), furniture & carpets (-20%), and in the “non-store” sector (-19%).

    Wholesalers:
    48% of wholesalers reported sales volumes to be up on last year and 20% said they were down, giving a balance of +28%.

    Motor traders:
    15% of motor traders reported sales volumes were up on a year ago, whilst 32% said they were down, giving a balance of -16%.

     

    AUTHOR

    Stuart O'Brien

    All stories by: Stuart O'Brien

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