Retail sales growth accelerated in the year to April, with volumes rising faster than expected, according to the latest monthly CBI Distributive Trades Survey. The survey of 112 firms, of which 57 were retailers, showed that the volume of sales grew at the fastest pace since September 2015 in the year to April. Overall, sales for the time of year were considered to be slightly above seasonal norms.
Looking ahead, however, volumes growth is expected to slow in the year to May and sales are tipped to be broadly average for the time of year, with orders expected to be largely unchanged.
Within the retail sector, the grocery sector performed particularly strongly while internet sales continued to grow at a solid pace in the year to April, in line with the long-run average, and are expected to grow at a broadly similar pace in May.
Meanwhile, wholesaling saw robust growth in sales volumes in the year to April.
Ben Jones, CBI Principal Economist, said: “Retail sales held up better than expected, especially considering that the Survey did not cover the Easter period. The warm weather in early April might go some way to explaining the uptick, with grocery sales driving overall growth.
“However, retailers are still cautious over the outlook, expecting slower growth over the year to May, as higher inflation eats into household spending. With price competition remaining fierce and rising costs squeezing margins, retailers face mounting pressures in the months ahead.”
Retailers:
- 59% of retailers said that sales volumes were up in April on a year ago, whilst 21% said they were down, giving a balance of +38%. This outperformed expectations (+16%), and was the highest balance since September 2015 (+49%).
- 37% of respondents expect sales volumes to increase next month, with 21% expecting a decrease, giving a balance of +16%.
- 32% of retailers placed more orders with suppliers than they did a year ago, whilst 21% placed fewer orders, giving a balance of +18%. This was the highest since October 2015 (+19%).
- 33% of retailers reported that their volume of sales for the time of year were good, whilst 20% said they were poor, giving a balance of +13%.
- Internet sales volumes continued to expand at a healthy pace (+48%), with growth broadly in line with the long-run average. Internet sales volumes are expected to grow at broadly similar pace in the year to May (+47%).
- Sales volumes grew strongly in grocers (+40%). Meanwhile sales volumes decreased in specialist food & drink (-43%).
Wholesalers:
- 69% of wholesalers reported sales volumes to be up on last year, and 6% said they were down, giving a balance of +63%, and beating expectations (+44%). Volumes are expected to grow at a slower pace next month (+8%)
- The volume of orders placed upon suppliers accelerated (+53%, from +31% in March), but is expected to be broadly flat in the year to May (-1%).
