Slight growth for high street sales

Retailers reported a slight rise in sales volumes in the year to September, along with the expectation that growth will strengthen somewhat next month according to a new CBI report.

In the CBI’s latest monthly Distributive Trades Survey, covering the first two weeks in September, 33 percent of retailers reported that sales volumes were up on a year ago, and 27 percent stated that sales had fallen. The resulting balance of +6 percent was in line with expectations (+6 percent), and an improvement on last month’s weaker performance (-3 percent). Looking ahead, retailers expect somewhat faster sales growth in the year to October (+15 percent).

While the volume of orders placed on suppliers was broadly flat (+2 percent), this was still a marked improvement from last month’s year-on-year fall (-11 percent) and beat expectations of another decline (-8 percent).

Stock levels also fell back relative to expected demand (+4 percent), and are now at their lowest since September 2009 (+3 percent).

Nonetheless, for the fifth consecutive month, high street retailers considered the volume of sales to be significantly below average for the time of year (-22 percent), and to a greater extent than expected (-15 percent).

Looking at the retail sectors, grocers recorded their fifth consecutive month of rising year-on-year sales (+55 percent) and chemists reported their first rise in sales since July 2010 (+19 percent). Non-store and footwear & leather sales also rose (+21 percent and +34 percent respectively), although the latter saw the slowest increase since May.

Judith McKenna, Chair of the CBI Distributive Trades Panel and Asda Chief Operating Officer, says it is encouraging that sales on the high street have seen a slight rise in the year to September, and that retailers expect growth to pick up further next month: “However, while the squeeze on family budgets may have eased in the short term thanks to the fall in inflation, on-going economic fragility, reflecting uncertainty around the international outlook, could affect household spending later in the year.”