Falling clothing sales drag on High Street - CBI
26 Jun 2014 10:34 AM
Retail sales growth
slows, but sales above average for the time of
year
High street sales growth slowed
markedly in the year to June, although the pace is expected to pick up next
month. That’s according to the latest monthly CBI Distributive Trades
Survey.
The survey of 133 firms showed
that although sales growth in June disappointed retailers’ expectations,
sales rose above average for the time of year.
Among the retail sub-sectors,
clothing was the main drag on the slowing of sales growth, with clothes sales
falling for the first time since January. Annual sales growth in grocers slowed
for the second month running. However, specialist food & drink sales rose
marginally in the year to June.
Internet sales volumes in the
retail sector rose solidly, but remained below the long-run average for a
second consecutive month.
Sales in both the motor trades
and wholesale sectors grew strongly, although the latter rose at a slower rate
than expected. Both sectors expect sales to increase robustly in the year to
July.
Barry Williams, Chair of
the CBI Distributive Trades Survey Panel and Asda SVP and Chief Merchandising
Officer for Food, said:
“After a recent improved
run for the High Street, a fall in clothing and food sales has contributed to a
disappointing month.
“Whilst it seems that
hopes that retail spending would be boosted by a strong performance by England
at the World Cup were as over ambitious as aspirations for a good performance,
I’m reassured that consumer confidence is still on the up, as household
budgets are being bolstered by falling inflation.
“However, whilst
discretionary income is still on the rise, slow wage growth continues to weigh
on how much consumers are willing to go out and spend.”
Key
findings
Retailers:
- 29% of retailers said that sales
volumes were up in June on a year ago, whilst 24% said they were down, giving a
rounded balance of +4%. This was below expectations (+29%)
- 27% of retailers expect sales
volumes to increase over the next month, with 10% expecting them to decrease,
giving a rounded balance of +17%
- 26% of retailers placed more
orders with suppliers than they did a year ago, and 19% placed fewer, giving a
balance of +7%. This is expected to grow further next month (balance of
+10%)
- 19% of retailers said that their
total retail sales volumes were above average for the time of year, whilst 11%
said they were below average, giving a balance of +8%
- Sales volumes grew in footwear
& leather (+100%), the non-store sector (+61%), furniture & carpets
(+41%), grocers (+25%), and hardware & DIY (+22%)
- Sales volumes decreased in
non-specialised (i.e. department stores) (-64%), chemists (-25%), recreational
goods (-25%) and clothing (-17%)
- Total internet sales volumes in
the retail sector rose solidly (+39%), but remained below the long-run average
(+52%)
Wholesalers:
- 45% of wholesalers reported
sales volumes to be up on last year and 22% said they were down, giving a
balance of +23%.
- Building materials (+80%) and
industrial materials (+54%) had the strongest showings
Motor
trades:
- 89% of motor traders reported
that sales volumes were up on a year ago, while none said they were down,
giving a balance of +89%, broadly in line with expectations
(+86%)
- Orders on suppliers also grew
strongly (+89%).
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