Retail sales growth at its fastest pace for over a year in the 12 months to November, according to the latest CBI quarterly Distributive Trades Survey.
The survey of 126 firms, of which 61 were retailers, shows that sales volumes for the time of year were considered well above average and are expected to grow at a broadly similar pace in December.
The volume of orders placed upon suppliers inched up for the first time in eight months with a further slight increase expected for the year to December.
The increase in retail sales volumes was driven by the clothing and non-store goods sectors, as well as hardware and DIY. Growth in internet sales volumes increased at a healthy pace over the same period, with expectations for growth in the year to December the strongest for two years.
Investment intentions for the year ahead were weaker than last quarter, but remained marginally positive. Average selling prices rose modestly, in line with expectations, with a similar increase expected next quarter. Retailers expect the overall business situation to improve slightly over the next three months.
Rain Newton-Smith, CBI Chief Economist, thinks that it’s great to see retailers reporting such a buoyant month for sales. With the later onset of cold weather, shoppers stocking up their winter wardrobe has helped to boost high street sales.
Newton-Smith adds, ‘While we expect to see decent growth in the near term, retailers are keeping a close eye on price rises coming down the track and the impact on consumer spending.’
Nearly half (42 per cent) of retailers report that there was sales growth in November on a year ago, while 16 per cent say they were down, giving a balance of +26 per cent, the strongest survey balance since September 2015. This was marginally above expectations (+21 per cent), and a slight improvement on the previous month’s balance (+21 per cent).
39 per cent of respondents expect sales volumes to increase next month, with 16 per cent expecting a decrease, giving a balance of +23 per cent.
Less than a third (31 per cent) of retailers placed more orders with suppliers than they did a year ago, whilst 24 per cent placed fewer orders, giving a rounded balance of +6 per cent, the strongest survey balance since December 2015.
Less than a third (29 per cent) of businesses report that their volume of sales for the time of year were good, whilst 5 per cent say they were poor, giving a balance of +24 per cent.
Sales growth in internet sales volumes rose above its long run average in the year to November (+51 per cent) up from the previous month (+37 per cent).
Average selling prices rose on a year ago (+14 per cent) and are expected to increase at a similar pace in December.
Further reading on