New figures from the CBI suggest an upturn in fortunes for the retail market. Image courtesy of: sxc.hu
Retailers saw little change in sales volumes on a year ago in the first half of February, although they held up better than expected, the CBI
The CBI’s latest quarterly Distributive Trades Survey
, which was conducted over the first two weeks of February, revealed that 34 percent of retailers reported an increase in their volume of sales in the year to February and 36 percent said they had seen a reduction. The resulting balance of -2 percent represents an improvement on last month’s survey (-22 percent) and exceeded expectations (-10 percent).
Similarly, the growth in the volume of orders placed upon suppliers was better than anticipated, although it remained weak (-4 percent).
Fortunes were mixed among retail sectors, with grocers reporting significant increases in their volume of sales (a balance of +55 percent), and non-store retailers - which includes online and mail order - recording +71 percent. However, other sectors were weaker. Clothing retailers reported -41 percent, the lowest figure since March 2009 (-98 percent), while sales of durable household goods (-100 percent), and hardware and DIY (-90 percent), continued to fall rapidly.
Price inflation in shops, although above the long-run average with a balance of +49 percent, is down from its peak a year ago (+73 percent), and at its lowest since late 2010 (+45 percent).
Looking ahead, retailers expect the volume of sales to remain broadly flat in March (+2 percent).
However, retailers remain concerned about the longer term outlook. Sentiment about the general business situation over the next three months remained negative in February (-12 percent), for the fifth quarter in a row. Investment intentions for the year ahead are now at their lowest since February 2009 (-43 percent).
Judith McKenna, Chair of the CBI Distributive Trades Panel and ASDA Chief Operating Officer, said: “It’s good to see there are more positive signs on our high streets. But consumers are clearly continuing to focus their spending on day-to-day needs, rather than big ticket or luxury items.
“With disposable incomes under constant pressure, retailers remain concerned about the general business outlook for the rest of 2012.”
Wholesalers beat expectations both on the increase in the volume of sales (+42 percent) and the volume of orders placed upon suppliers (+36 percent). While employment rose a little (+5 percent), and wholesalers felt more positive about the business situation (+21 percent), this was not reflected in firms’ investment intentions (-10 percent).
In motor trades, sales volumes fell in the year to February (-18 percent) with sales of new and used vehicles still falling rapidly (-44 percent), while parts and accessories (+5 percent) helped to lift the overall sector figures. Motor traders felt more negative about the business situation (-6 percent), and are scaling back investment (-28 percent).