CBI: ‘Solid’ high street growth continues, pace of growth eases

Retail sales volumes continued to grow solidly in the year to September, albeit at a slightly slower pace than in the previous month, according to the latest figures from the Confederation of British Industry (CBI).

Its latest monthly Distributive Trades Survey of 123 respondents also showed that the volume of orders placed on suppliers in the retail sector “grew strongly, and broadly in line with expectations”. Sales rose “well above average for the time of year”, while stock adequacy edged slightly lower once again.

Sales growth was broad-based across most sub-sectors. Department stores led the way, and footwear and leather, and furniture and carpets retailers also performed strongly. However annual sales growth among grocers, the largest sub-sector, slowed significantly, while chemists’ sales volumes fell, after having reported strong annual growth in the previous month.

The CBI said retail sales volumes are expected to rise strongly again in the year to October, but the pace of growth is set to ease further.

Rain Newton-Smith, CBI director of economics, said: “Solid growth continues on the high street, with most sectors doing decent business and department stores performing particularly well. However, the pace of growth in the grocery sector tailed off significantly compared with the previous survey.

“Retailers are expecting sales to grow again next month, but at a steadier pace.”

Key findings:

• 48% of retailers said sales volumes increased, while 17% said they fell, giving a balance of +31%
• Growth was broad based across most sub-sectors, with department stores performing particularly strongly (+100%). Footwear & leather and furniture & carpet retailers also grew strongly (+61% and +81%). Growth in the grocery sector eased (+25% compared with +60% in August). Chemists’ sales volumes fell on a year ago (-13%)
• 33% said that orders were up, while 15% said they fell, giving a balance of +19%
• The volume of sales, 3 month moving average, was +30% – the highest since February 2013 (+33%)
• The volume of stock in relation to expected demand was +18%, slightly lower than the previous survey (+23%)
• 42% of retailers said they expect sales volumes to increase in the year to October, while 16% said they will fall, giving a balance of +26%.