skip to Main Content
Retail Sales Climb

RETAIL SALES EDGE UP, AMIDST MIXED PICTURE – CBI

Retail sales picked up slightly on a year ago, following last month’s fall, according to the latest CBI quarterly Distributive Trades Survey.

The survey of 121 firms, of which 60 were retailers, showed that the volume of sales grew modestly, in line with expectations, and similar to the growth seen at the start of the year. But sales are expected to drop slightly next month, and orders placed on suppliers fell sharply over the year, at their fastest since March 2009.

Within retail, department stores, specialist food & drink and grocers were weak performers. But this was offset by growth in other sectors, such as hardware & DIY, clothing and recreational goods.

Internet sales volumes grew significantly on the previous month, outstripping expectations, although growth is expected to see a small fall in June.

Retailers expect a marginal improvement in the business situation in the next three months, but sentiment is improving at a weaker rate compared with the past year. Investment intentions have deteriorated further, reaching the lowest level since August 2013, and retailers expect to cut headcount next month (following no growth in employment in this month’s survey).

Meanwhile, wholesaling saw continued growth in sales volumes, and motor trades reported better than expected growth.

Rain Newton-Smith, CBI Director of Economics, said:

“A bit like the start of the British summer, it’s been a mixed bag for the retail sector this month. Whilst sales have risen a little, they are expected to fall again next month, and orders have dropped sharply.

“Even though low inflation is still boosting pay packets, retailers are continuing to operate in a tough environment, with strong price competition squeezing margins.

“With a cloud of uncertainty hanging overhead, particularly from challenging global conditions and the outcome of the EU referendum, it’s not surprising to see investment intentions deteriorating and business sentiment levelling off.”

Retailers

Key findings:

  • 36% of retailers said that sales volumes were up in May on a year ago, whilst 29% said they were down, giving a balance of +7%. This was in line with expectations (+9%), and an improvement on the previous month’s balance (-13%)
  • 21% of respondents expect sales volumes to increase next month, with 26% expecting a decrease, giving a balance of -5% – the lowest since May 2013 (-6%)
  • 11% of retailers placed more orders with suppliers than they did a year ago, whilst 43% placed fewer orders, giving a rounded balance of -31%. This was the lowest since March 2009 (-47%)
  • 14% of businesses reported that their volume of sales for the time of year were good, whilst 22% said they were poor, giving a balance of -8%
  • Investment intentions for the next year, relative to the last year, deteriorated (-13%) to their lowest since August 2013 (-14%). The outlook for the business situation also softened (+5%)
  • Total internet sales volumes improved (+49%) compared with the previous month (+19%), to sit at the long run average
  • Sales volumes grew in hardware & DIY (+69% – the highest since April 2015 (+61%)), clothing (+60) and recreational goods (+59%). They decreased in grocers (-25%), specialist food & drink (-45%) and department stores (-52%).

Wholesalers

  • 41% of wholesalers reported sales volumes to be up on last year, and 15% said they were down, giving a rounded balance of +27%
  • Volume of orders placed upon suppliers increased (+23%), at a slightly faster pace than in April (+17%)
  • Investment intentions for the next year are broadly stable (+1%).

Motor traders

  • 53% of motor traders reported sales volumes were up on a year ago, whilst 18% said they were down, giving a rounded balance of +36%. Volumes are expected to grow again next month (+45%)
  • Volume of sales for the time of year strengthened to +44%, far outstripping expectations of no growth.
LISTEN LIVEPODCASTSWATCH
SHOP
Privacy Settings
Name Enabled
Cookies
We use Cookies to give you a better website experience.
x

We use cookies to give you the best online experience. By agreeing you accept the use of cookies in accordance with our cookie policy.

Back To Top