25th February 2014
Shoppers have been taking to the streets, boosting the UK’s economic engine as new figures reveal that not only did retail sales rise strongly in the year to February but they beat expectations writes Philip Scott.
According to business trade body the CBI, in its latest quarterly Distributive Trades Survey, retail sales accelerated at their fastest pace since June 2012.
The survey of 120 firms showed that sales have grown for the ninth consecutive month, while retailers’ investment intentions for the year ahead were at their highest since November 2010.
Some 45% of respondents reported that sales volumes were up on a year ago, while just 8% said they were down, giving a balance of +37%, the strongest since summer 2012, which stood at +42% and easily beating expectations of +15%.
Sales volumes were strong once again among grocers, clothing and furniture & carpet retailers but specialist food & drink recorded a fall in sales volumes for the second consecutive month. Sales were broadly in line for the time of year, while orders picked up, consistent with expectations, and firms anticipate they will strengthen again in the next month.
Internet sales volumes among retailers maintained robust growth in the year to February, although they are expected to slow somewhat next month.
Employment fell on a year ago for the first time in a year, with a further small fall expected next month. But retailers envisage their business situation improving over the next quarter. Meanwhile, growth in retail sales in the year to March is expected to moderate from this month’s strong pace, but should remain robust nonetheless.
Barry Williams, Asda chief merchandising officer for food and chair of the CBI Distributive Trades Survey Panel says: “The high streets have kicked on once again this month, with growth the strongest since the summer of 2012.
“There is growth across many sectors, including grocers and clothing outlets, while investment intentions are at their highest for more than three years. Although we are by no means seeing a universally confident shopper, the positive indicators have perhaps given some people the urge to spend.
“Overall sales have been remarkably resilient in the face of disruption from the exceptional weather across the UK, which has badly affected many families and businesses.”
In addition the report found that wholesalers recorded solid growth in sales volumes in the year to February, while their investment intentions for the year ahead were at a record high. Motor traders saw strong sales growth, while optimism over the business situation for the quarter ahead was at its highest since 1994.
The business update will be welcomed on the back of the news that the UK economy grew by 1.9% in 2013, its strongest rate since 2007, according to the Office for National Statistics.