- Huw Hughes |
Retail sales stabilised in the year to January, remaining well below average for the time of year, but are expected to grow in February, according to new data from the CBI Distributive Trades Survey.
Sales volumes fell in the majority of retail sub-sectors, with clothing (-43 percent) and footwear and leather (-53 percent) posting particularly large declines. Online sales rose at a similar pace as observed in December 2018 - slightly above the long-run average - but is expected to slow in the year to February, to slightly below the long-run average.
The outlook for the coming month is better, according to CBI, as retail sales volumes and orders are expected to rise in the year to February, with 43 percent of respondents expecting sales volumes to increase next month, whilst 19 percent expect a decrease.
'The High Street has had another challenging month’
The survey also saw a strong rise in the ratio of stocks to expected sales, with 27 percent of retailers placing more orders with suppliers than they did a year ago, suggesting a mix of weaker-than-expected demand and companies stockpiling in case of a no-deal Brexit. These stockpiling efforts are now at their highest levels since since the 2008 financial crisis.
Commenting on the data in a statement, Rain Newton-Smith, chief economist at CBI, said: “The High Street has had another challenging month, with retail sales volumes flat and well below average for the time year. Pressures on the retail sector remain high, with consumer spending expected to remain fairly subdued and competition fierce.
“There are early signs of companies bracing themselves for a no-deal Brexit: some of our wholesalers are now reporting that they’re building up stocks in case the UK exits the EU without a deal. It’s absolutely vital politicians act immediately to take No Deal off the table, protect the UK economy and avoid devastating disruption.”
CBI's data was taken from a survey of 103 firms, of which 42 were retailers.
Photo credit: FashionUnited