CBI: Great Expectations on the UK High Street But Not Out of The Woods Yet
High-street sales continued to grow strongly in the year to September, at the fastest pace since June 2012, and exceeded already solid expectations, according to the CBI’s latest monthly Distributive Trades Survey of 111 firms.
This was the third consecutive month of growth, which was broad-based across a number of sectors. Retail sales are expected to grow robustly again in October.
Elsewhere, the pace of growth in wholesaling picked up markedly, whereas growth continued in the motor trade sector, but at a slower pace than in the previous two months.
Barry Williams, Asda Chief Merchandising Officer for Food, and Chair of the CBI Distributive Trades Survey Panel, said:
“It’s encouraging to see the high street on the road to recovery, with particularly strong growth from furniture & carpet retailers, department stores and recreational goods retailers.”
“But the retail sector is not out of the woods yet with consumer confidence still fragile despite the rise in spending.”
46% of respondents reported that sales volumes were up on a year ago, while 12% said they were down, giving a balance of +34% – the strongest since June 2012 (+42%) and exceeding expectations (+26%)
Retailers expect sales volumes to grow at a similarly strong pace next month (+31%)
There was a broad-based increase in sales across many sub-sectors with furniture & carpets, department stores, recreational good retailers and grocers performing strongly:
A balance of +100% of furniture & carpets retailers said business volumes were up – the strongest since August 1996.
52% of department stores said business volumes were up, while 0% said they were down, giving a balance of +52%
65% of recreational goods retailers said business volumes were up, while 0% said they were down, giving a balance of +65%
50% of grocers said business volumes were up, while 17% said they were down, giving a balance of +33%.
Chemists were the only sub-sector to report a fall in business volumes (-72%)
Overall, 22% of retailers said that sales volumes were above average for the time of year, while 10% said they were below average, giving a balance of +12% – the highest survey balance since December 2010 (+18%)
36% placed more orders with suppliers than they did a year ago and 22% placed fewer, with the resulting balance of +14%.
50% of wholesalers said sales volumes were up while 10% said they were down, giving a balance of +40% – the strongest pace of growth since June 2013 (+45%). Most sub-sectors saw growth, with building materials (+100%) and clothing, textiles & footwear (+56%) in the lead. Only food & drink saw a decline in sales (-13%), marking the first year-on-year fall since May. Overall, sales are expected to rise solidly again in the year to October, but at a slower pace than this month (+28%).
64% of motor traders said sales volumes were up while 36% said they were down, giving a balance of +28%, a slower pace of growth than in the previous month (+93%).