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UK retail sales fall at steepest rate since Jan 2012
01
Jun '13
Retail sales fell at their fastest rate in more than a year in May, according to the CBI’s latest monthly Distributive Trades Survey.

The survey of 69 retailing firms saw the steepest fall in sales since January last year – showing retail activity has weakened persistently during 2013.

Overall sales volumes remained below average for the time of year and orders fell faster than at any point since November 2011.

The detailed findings show that grocery sales were broadly flat on a year ago, reversing last month’s rise. There were falls in sales across most other sub-sectors, including clothing and footwear.

Retailers are reporting a slightly brighter outlook, expecting sales to rise modestly next month and the business situation to improve over the next quarter.

But firms are planning to scale back their investment for the year ahead – with investment intentions now the weakest since the start of last year.

Barry Williams, Asda Chief Merchandising Office for Food and Chair of the CBI Distributive Trades Survey Panel said:

“Retail sales growth has weakened since the start of the year as households continue to feel the pinch, with wages failing to keep pace with the cost of living.

“There is positivity from retailers this month, however, with sales expected to rise in the coming months.”

The survey was conducted between 24th April and 15th May 2013.

Retailers:

Key findings:

- 23% of firms reported that sales volumes were up on a year earlier and 33% said they were down - the resulting balance of -11% was the lowest since January 2012 (-22%), disappointing expectations last month of a much slower decline (-6%).

- 8% reported sales volumes to be above average for the time of year and 25% below – with the resulting balance of -17% below expectations (-11%).

- 21% placed more orders with suppliers than they did a year ago and 46% fewer, with the resulting balance of -25%, down on expectations of -15% and the lowest since November 2011 (-25%).

- Grocers’ sales were broadly flat (-3%) after a rise last month (+20%). Other sub-sectors reporting year-on-year falls included clothing (-21%); footwear & leather (-11%); specialist food & drink (-45%); non-store (-4%; the first fall since August 2011); and durable household goods (-67%). Sales of furniture & carpets (+71%) and recreational goods (+57%) rose.

- Sales volumes are expected to rise modestly in June, with 29% of firms expecting an increase versus 20% predicting a fall, resulting in a rounded balance of +10%.

- 16% of retailers expect business conditions to improve over the next three months and 7% expect them to deteriorate, giving a rounded balance of +10% - similar to the optimism expressed in the February quarterly survey (+12%).

- 41% of retailers are planning to cut back on investment over the next year relative to the past twelve months, compared with 18% planning to raise capital spending – the balance of -23% is the lowest since February 2012,

- 33% of retailers reduced employment in the year to May and 33% increased employment, giving a rounded balance of 0% - a slight improvement on the year to February (-7%) and in line with expectations (-1%).

The survey also heard from 57 wholesalers and 11 motor traders.

Confederation of British Industry

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