Although sales growth was weaker than expected last month, the CBI survey of 106 firms indicated that retail sales have grown year-on-year for the fourth consecutive month. Sales figures are expected to increase again in the year to April with a balance of +36%, which will bring the growth rate back into line with February, the strongest since the onset of the financial crisis.
According to the survey, 36% of respondents said sales volumes were up compared to a year ago, while 23% said sales volumes were lower, resulting in a balance of +13%.
The survey showed that although Grocers’ sales grew solidly at +20%, this was slowest rate in four months, which along with lower sales in non-specialised stores, such as department stores, contributed to overall slower annual growth in March. Clothing sales also grew, with a balance of +27%, but slightly down on February’s balance of +33%. Sales of ‘other’ goods also significantly increased, with a balance of +44%, the fastest pace since December 2010.
Sales volumes for the Internet retail sector continued to rise strongly in the year to March with a balance of +55%, the fastest rate in eleven months. This growth rate remained in line with a long-run average of the series since August 2009.
The CBI monthly Distributive Trades Survey also revealed that 15% of retailers reported that sales volumes were above average for the time of year, however 30% said sales volumes were below average, resulting in the lowest balance since July 2013 of -15%. The number of retailers placing more orders with suppliers increased to 31% compared to a year ago, while 25% of retailers placed fewer orders, giving a lower than expected balance of +6%, which was lower than the previous month’s balance of +16%.
Just over half of wholesalers said their sales volumes were higher compared to a year ago, while 22% reported a fall in sales volumes, resulting in a balance of +29%. The strongest growth was in building materials at +96%, industrial materials at +82% and clothing, textiles & footwear at +65%, which was the highest since August 2010.
In the motor trade, sales volumes increased for 46% of motor traders, while 43% reported lower sales, giving a balance of +3%. This balance was well below an anticipated balance of +63%, however, sales are expected to rise solidly in the year to April.
Barry Williams, chair of the CBI Distributive Trades Survey Panel and Asda chief merchandising officer for Food, commented:
“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.