UK retail sales remain buoyant, says CBI
Retail sales on the UK high street have grown for the second month running, and sales growth is expected to continue at a similar pace through Easter, according to the CBI’s latest Distributive Trades Survey.
It found 39% of retailers said sales volumes in early March were higher when compared against the same period in 2009, and 26% said they were lower. The resulting balance of +13% was broadly in line with expectations (+16%), though marks a slowing on February's strong sales growth (+23%).
Looking ahead to April, a balance of 14% of retailers expect sales will be higher than they were a year ago.
The three-month moving average of sales volumes stayed positive for the fifth consecutive month (a balance of +9%) and similar growth is expected in April.
Sales were described as poor for the time of year by a net 6% of retailers, and a similar balance expects sales to remain below the seasonal norm next month (-4%).
The volume of orders placed on suppliers grew for the second consecutive month, reflecting the rise in sales volumes, with a net 7% reporting an increase in orders. Orders are expected to grow at a similar rate next month.
A net 6% of retailers said that stock levels were more than adequate to meet predicted demand. Stock adequacy has stayed below its long-run average since May 2009, and next month stocks are expected to be broadly adequate relative to expected demand.
Examining the individual retail sectors, grocers and durable household goods retailers reported very strong annual sales growth. Clothing shops and furniture and carpet retailers also continued to grow sales, but at a much slower pace than in February. Hardware, china and DIY sales fell sharply again, though not as rapidly as last month.
Andy Clarke, chairman of the CBI Distributive Trades Panel, and chief operating officer of Asda, said: "Despite not matching the strength seen in February, it's encouraging that high street sales have continued to grow this month. The outlook for Easter may still be positive but, with a weak economy and pay freezes for many, consumers are likely to remain cautious for some time.
“While grocers continue to outperform relative to other parts of the high street and sales of some big-ticket household goods are still growing strongly, hardware and DIY sales continue to struggle. Conditions will stay tough on the high street for some time, and shoppers will be holding their breath for the Budget."
Sales volumes in the wholesale sector fell sharply (a balance of -13%), despite expectations of slight growth. Sales are predicted to be broadly flat next month (-2%). Food and drink wholesalers reported strong sales growth, though at a slower rate than in February. However, agricultural machinery wholesalers and builders merchants had a particularly difficult month.
Motor traders' sales volumes fell for the third consecutive month (a balance of -10%), but strong growth is expected next month (+41%). The fall in overall volumes was driven by a drop in vehicle sales, while parts & accessories vendors reported a second month of growth.
April 2010 Issue