Retail sales rise above seasonal norms in April, for first time in 2021

27 Apr 2021 12:21 PM

In April, retail sales volumes were viewed as good for the time of year for the first time in 2021 and to the greatest extent since June 2018, according to the CBI’s latest monthly Distributive Trades Survey.

The survey – which aggregated the views of 124 businesses, including 60 retailers – showed sales are expected to remain above seasonal norms in the year to May, with non-essential retail stores across the UK able to re-open by late-April.

Hardware & DIY and furniture & carpets subsectors saw sales significantly above seasonal norms, supported by a consumer focus on home improvement. Grocers and non-store retailers also reported that sales were good for the time of the year. However, clothing and footwear store sales remained well below seasonal norms.

Annual growth in sales was strong, with volumes rising at the fastest pace since September 2018 in the year to April, although this was flattered by the low base for comparison, with sales in April 2020 having been significantly impacted by the first national lockdown. Growth in sales volumes is expected to slow next month. Internet sales continued to grow at an above average pace and are expected to do so again in the year to May.

The volume of orders placed by retailers with their suppliers was broadly unchanged in the year to April, but is expected to fall slightly in the year to May. Meanwhile, the level of stocks in relation to expected sales was seen as broadly adequate in April, but this was the lowest survey balance since 2009, with little change expected next month.

Meanwhile, motor traders and wholesalers reported that sales were good for the time of year for the first time since October and December, respectively. However, both sectors reported stock levels in relation to expected sales as too low and expect this to remain the case next month.

Ben Jones, Principal Economist at the CBI, said:

“Springtime has brought some relief to the retail sector, with non-essential stores in England and Wales re-opening earlier this month, and retailers in Scotland and Northern Ireland following suit in the final week of April.

“Despite progress along the roadmap, the impact of Covid-19 restrictions are still biting hard. The improvement in retail sales this month was driven by sectors that have performed relatively well during the pandemic, with little immediate rebound expected for more embattled sectors such as clothing, footwear and department stores.

“And retailers are still facing challenges around inventory management and their supply chains, amid trade disruption, big shifts in consumer behaviour and uncertainty over how long some degree of social distancing could remain in place.”

Key findings

Retail

• Retailers reported sales volumes as good for the time of year, (balance of +16% from -37% in March). Sales are expected to remain above seasonal norms next month (+11%).
• Sales grew at the fastest pace since September 2018 in the year to April (balance of +20% from -45%), driven partly by base effects due to the sharp fall in sales volumes seen in April 2020. Sales growth is expected to slow next month (+10%).
• Order volumes were broadly flat in the year to April (balance of -1% from -33%) and are expected to fall in the year to May (-8%).
• The volume of stocks in relation to expected sales was seen as broadly adequate (balance of 0% from +9%) and is expected to remain so next month (-1%).
• Internet sales grew at a similarly sharp rate to last month (balance of +57% from +60%) which remains above the long run average (+46%). Sales are expected to grow at a slightly faster rate in the year to May (+62%).

Wholesalers and motor trade

• Wholesalers (balance of +11% from -5%) and motor traders (+21% from -26%) reported that sales volumes were above seasonal norms for the first time since December and October, respectively. Both wholesalers (+7%) and motor traders (+21%) expect this to remain the case next month.
• The volume of stocks in relation to expected sales for both wholesalers (balance of -8% from -5%) and motor traders (-8% from -4%) were reported as too low. Both sectors expect stocks to be too low again next month (-7% and -39% respectively).