Retail sales continue to grow but at slower pace
Retail sales grew again in the year to March, although at a slower pace, but growth next month is expected to rebound strongly. That’s according to the CBI’s latest monthly Distributive Trades Survey.
The survey of 106 firms showed that sales have grown year-on-year for the fourth consecutive month. However, sales growth weakened on last month to a greater extent than expected.
Sales are expected to pick up again in the year to April and if realised, this will bring the growth rate back into line with February, which was the strongest seen since the onset of the financial crisis.
Grocers’ sales grew solidly, but at the slowest rate in four months and, along with falling sales in non-specialised stores (such as department stores), this contributed to overall slower annual growth in March.
Internet retail sales volumes continued to rise strongly in the year to March, with the pace of growth remaining in line with its long-run average (since August 2009).
Barry Williams, Asda chief merchandising officer for food, and chair of the CBI distributive trades survey panel, said: “It’s promising to see a run of positive growth rates on the high street, with sales up on a year ago for the fourth month in a row. We’re hopeful that this will continue, but there are still signs that this needs to be a cautious hope.
“The pace of growth has slowed, likely in part down to the later timing of Mother’s Day and Easter this year – conversely, this is the same reason many retailers are looking forward to more robust growth next month.
“I’m very interested in two of the statistics in particular – given the rise of online shopping, it’s no great surprise that internet sales volumes are still strongly increasing. And in terms of wholesale, the huge jump in building sales is in-line with what we’re hearing about the property and building industry in general.”
Key findings:
Retailers
– 36% of respondents reported that sales volumes were up on a year ago, while 23% said they were down, giving a balance of +13%
– Retailers expect sales volumes to grow at a robust pace next month (+36%), with 47% expecting them to rise and 10% to fall. This is the highest expected growth since December 2010 (+45%)
– Sales grew across many sub-sectors:
– Grocers’ sales grew solidly (+20%), but at the slowest rate in four months
– Clothing sales also grew substantially (+27%), but a little slower than last month (+33%).
– Sales of other goods rose strongly (+44%), at the fastest pace since December 2010.
Internet sales volumes continued to rise strongly (+55%), at the fastest pace in eleven months, remaining broadly in line with the long-run average of the series (since August 2009)
– 15% of retailers said that sales volumes were above average for the time of year, while 30% said they were below average, giving a balance of -15%, the lowest since July 2013
– 31% placed more orders with suppliers than they did a year ago and 25% placed fewer, giving a balance of +6% – lower than expected (+24%), and lower than last month (+16%).
Wholesalers
51% of wholesalers reported sales volumes to be up on last year and 22% said they were down, giving a balance of +29%. Building materials (+96%), industrial materials (+82%) and clothing, textiles & footwear (+65%) had the strongest showings. The rate of growth for clothing, textiles & footwear sales (+65%) was the highest since August 2010.
Motor traders
46% of motor traders reported sales volumes to be up on last year and 43% said they were down giving a balance of +3%, which was significantly below expectations (+63%). However, sales are expected to rise solidly in the year to April (+33%).
