Retail sales volume growth slowed at the start of this month as grocers saw their greatest decline since November 2008, figures released today reveal.
The pace of growth has slowed for the third consecutive month, according to the CBI‘s latest quarterly Distributive Trades Survey, as 37 per cent of retailers reported an increase in sales volumes in the year to February while 29 per cent reported a reduction, and the resulting eight per cent balance is the lowest figure since September 2012.
Analysts expected the volume of orders to remain flat over the first two weeks of February though they fell sharply to -19 per cent, but retail sub-sectors reported “broadly positive” results.
Overall sales volumes strengthened on a year ago with clothing seeing a 91 per cent rise in the volume of sales, the highest figure since October 2010 while non-store goods and furniture and carpets saw an increase of 70 per cent and 61 per cent respectively.
“We all know trading is tough, and the bad weather hasn‘t exactly been encouraging shoppers to hit the high street lately,” said Asda Chief Merchandising Officer for Food, and Chair of the CBI Distributive Trades Survey Panel Barry Williams.
“But there is a glimmer of hope for retailers with the news that sales are growing, even if at a slower pace than in recent months.
“Clearly, the road to recovery remains fragile. Worries about the economy, pay freezes and the rising cost of living will mean shoppers remain cautious for the foreseeable future.”
Looking ahead, the CBI noted that retailers anticipate sales volumes to “see little change in March” as sentiment about the general business situation in the coming three months remains positive, though experts have warned that fading momentum is likely to continue.
“February‘s CBI Distributive Trades Survey suggested that the momentum enjoyed by retailers in the first month of the year is fading,” said Martin Beck, UK Economist at market analyst firm Capital Economics.
“Pressures on household budgets, not least the recent jump in petrol prices, mean that this slowdown is likely to intensify.
“Admittedly, on the basis of past form, February‘s survey is still consistent with annual growth in the official measure of retail sales of over 3 per cent.
“But the CBI‘s results have tended to paint a more optimistic retail picture in recent months than the official data, so we would be cautious about placing too much weight on them.
“And a general slowing in sales growth as indicated by the CBI survey seems likely to continue.”