WIREDGOV

Retail sales volumes grew in the year to August following last month’s fall, according to the latest CBI survey.

The survey of 131 firms, of which 58 were retailers, showed that the volume of sales grew modestly over the year, beating expectations for a further fall this month. However, sales volumes look set to be broadly flat over the next month.

The volume of orders placed upon suppliers fell for a fifth consecutive month although retailers expect them to grow somewhat in the year to September.

While grocers’ sales were broadly flat in the year to August, clothing reported a strong month for sales volumes. Growth in internet sales volumes picked up over the same period, outstripping expectations, with broadly similar growth expected next month.

Investment intentions for the year ahead turned positive following the most negative results since 2013 in the previous quarter. Year-on-year employment was again flat in the year to August, although retailers expect a small cut in headcount in September. While retailers anticipate a further small improvement in their business situation, sentiment is improving at a slower rate than over the past year. Average selling prices fell on a year ago, after rising over the first half of this year.

Anna Leach, CBI Head of Economic Analysis and Surveys, said:

“The summer weather has brought shoppers out onto the high street with retailers reporting that sales growth has risen, outdoing expectations, although firms do expect sales growth to ease next month.

“While the fall in Sterling has boosted visitor numbers to the UK, it is likely to push up the price of imported goods over time which will mean households will be more likely to rein back spending on non-essentials.”

Retailers

Key findings:

• 35% of retailers said that sales volumes were up in August on a year ago, whilst 26% said they were down, giving a balance of +9%. This was above expectations (-12%), and a marked improvement on the previous month’s balance (-14%)25% of respondents expect sales volumes to increase next month, with 22% expecting a decrease, giving a balance of +3%
• 26% of retailers placed more orders with suppliers than they did a year ago, whilst 33% placed fewer orders, giving a balance of -7%
• 22% of businesses reported that their volume of sales for the time of year were good, whilst 14% said they were poor, giving a balance of +8%
• Growth in internet sales volumes accelerated in the year to August (+42%) up from the previous month (+23%)
• Sales volumes grew in clothing (+39%) and non-store goods (+66%) among others. Sales volumes for grocers were relatively flat (+3%)
• Average selling prices fell (-5%) for the first time since November 2015.
• Investment intentions for the next year strengthened (+15%). The business situation was expected to improve further (+7%).

Wholesalers

• 44% of wholesalers reported sales volumes to be up on last year, and 22% said they were down, giving a rounded balance of +22%.

Motor traders

• 30% of motor traders reported sales volumes were up on a year ago, whilst 0% said they were down, giving a balance of +30%. Volumes are expected to grow at a faster pace again next month (+43%).

Notes to Editors:

1. Firms responding to the Distributive Trades Survey (DTS) are responsible for a third of employment in retailing. The survey includes measures of sales activity across the distributive trades. It was first introduced in 1983 and the retail results form the UK component of the EC survey of retail trades.
2. The survey was conducted between 27th July and 12 August 2016. 131 firms took part, of which 58 were retailers, 63 were wholesalers and 10 motor traders.
3. A balance is the difference between the percentage of respondents reporting an increase and those reporting a decrease.