Retail sales downturn eases in January – CBI Distributive Trades Survey
Retail sales volumes continued to fall in the year to January, but at a markedly slower rate relative to December – according to the latest CBI Distributive Trades Survey.
Retailers anticipate the sales downturn to regain pace in February.
Key findings included:
- Retail sales volumes contracted in the year to January at a markedly slower rate than in December (weighted balance of -17% from -44% in December). However, sales are expected to decline at a quicker pace next month (-30%).
- Sales for the time of year were judged to be “poor” in January, but to a lesser extent than last month (-15% from -31% in December). February’s sales are set to disappoint to a comparable degree (-16%).
- Online retail sales volumes declined in the year to January at the fastest pace since June 2024 (-41% from -12% in December) but are anticipated to recover moderately next month (+12%).
- Wholesale sales volumes continued to drop sharply in the year to January (-46% from -50% in December), with a similar pace of decline expected next month (-43%).
- Total distribution sales volumes fell in the year to January at a slower rate relative to December (-34% from -46% in December). Firms expect the sales decline to continue at a similarly firm pace next month (-37%).
Martin Sartorius, lead economist, CBI, said: “While the annual decline in retail sales did ease slightly in January, this improvement is expected to be short‑lived, with sales forecast to fall at a quicker pace next month. Retailers continue to report that household spending is being weighed down by subdued confidence and cautious behaviour. Weak demand conditions were also reported in the wholesale sector, where sales volumes fell sharply year-on-year.
“Against a backdrop of weak demand, firms need to see the government taking decisive action to lower the cost of doing business. Recent pragmatism on day one rights is welcome, but retailers and wholesalers will be wary of the forthcoming rise to the National Living Wage adding to cost pressures at a time of declining volumes and diminishing margins.”
In addition, data from the survey showed:
- Retail orders placed upon suppliers declined at a firm pace in the year to January, following a steep fall in December (-27% from -42% in December). Retailers expect to cut back on order volumes at a slower rate in February (-12%).
- Retail stock volumes relative to expected sales in January were broadly in line with the long-run average (+20% from +35% in December; long-run average of +18%) and are set to soften slightly in February (+15%).
- Motor trades sales volumes contracted in the year to January at a slower pace compared to last month (-28% from -39% in December). Sales are anticipated to fall at a quicker rate next month (-36%).