UK retail sales rise for first time in five months

31 Jul '13

3 min read

Retail sales saw the first rise in five months in the year to July, according to the CBI’s latest monthly Distributive Trades Survey.

The survey of 60 retailers saw year-on-year high street sales this month grow at a stronger pace than expected, after a flat first half of 2013 - the first rise since February.

But overall sales volumes remained below average for the time of year and sales growth is expected to ease back slightly in August.

The detailed findings show the strongest growth in clothing since February; a further rise in footwear sales; and department store sales showed their strongest growth since 1983.

Other sub-sectors – including furniture & carpets and specialist food & drink – saw falling sales volumes, while grocery sales growth remained modest.

Stephen Gifford, CBI Director of Economics, said:

“The feel-good factor from the heat wave and early summer sales has helped boost high street sales, after a very weak start to the year.

“A return to even modest spending is welcome news but the bottom line is that confidence will not bounce back fully until family finances improve significantly.

“A positive knock-on effect on retail sales from the royal baby has been mooted, but much more realistically, continued good weather and discounts will play a greater role in retail growth over the next month.”

The survey, which is 30 years-old this month, was conducted between 26th June and 16th July 2013.

Retailers

Key findings

-43% of firms reported that sales volumes were up on a year earlier and 26% said they were down - the resulting balance of +17% was the highest since January 2013 (+17%). This was slightly above expectations of +13%.

-18% reported sales volumes to be above average for the time of year and 37% below – the resulting balance of -19% was below expectations of more modest decline of -6%.

-34% placed more orders with suppliers than they did a year ago and 27% fewer, with the resulting balance of +7%, slightly up on expectations of +2% and the highest since January 2013 (+15%).

-Grocers’ sales growth was modest (+6%), marginally down on last month (+9%). Other sub-sectors reporting year-on-year rises included department stores (+98%), clothing (+73%) and footwear & leather (+17%). Falls included specialist food & drink (-43%) and furniture & carpets (-73%).

-Sales volumes are expected to rise again in the year to August, with 39% of firms expecting an increase versus 29% predicting a fall, resulting in a rounded balance of +10%.

Wholesalers

37% of wholesalers reported sales volumes to be up on last year and 13% said they were down, giving a rounded balance of +25% - a slower pace than in June (+45%) but well above expectations (+5%) and driven in part by the fastest rise in food & drink sales since September 2011. However, wholesalers expect sales growth to ease back next month (+15%).

CBI

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