Retail sales growth picked up in the year to July, exceeding expectations for minimal growth, according to the latest monthly CBI Distributive Trades Survey.
The survey of 111 firms, of which 57 were retailers, showed that the volume of sales grew at a healthy pace driven by grocery and clothing sales in particular – while orders placed on suppliers rose at a solid pace for a second consecutive month. Overall, sales for the time of year were considered to be slightly above seasonal norms.
Looking ahead, retailers expect steady expansions in both sales and orders in the year to August, at paces similar to those seen this month.
Growth in internet sales was little changed from last month in the year to July, and marginally below the long-run average.
Elsewhere in the distribution sector, wholesalers continued to report above-average growth in sales volumes, but motor traders reported the fastest drop in sales since November 2013.
Anna Leach, CBI head of economic intelligence, said: “The warm summer has added a sizzle to our high streets as shoppers defied expectations, with sales growth in clothing shops and grocers driving overall performance.
“But while retailers expect a similar pace of growth next month, the factors underpinning their sales growth are more shaky. Although employment is strong, real incomes are falling in the wake of higher inflation, and that’s expected to feed slower consumer spending growth ahead.”
- 48 per cent of retailers said that sales volumes were up in July on a year ago, whilst 26 per cent said they were down, giving a balance of +22 per cent. This out-performed expectations last month (+3 per cent)
- 40 per cent of respondents expect sales volumes to increase next month, with 20 per cent expecting a decrease, giving a balance of +20 per cent
- 32 per cent of retailers placed more orders with suppliers than they did a year ago, whilst 22 per cent placed fewer orders, giving a balance of +10 per cent.
- 23 per cent of retailers reported that their volume of sales for the time of year were good, whilst 17 per cent said they were poor, giving a balance of +6 per cent
- Internet sales volumes expanded at a steady pace in the year to July (+43 per cent) and are expected to grow at near similar pace in the year to August (+41 per cent)
- Year-on-year sales volumes increased strongly in clothing (+34 per cent) and grocers (+53 per cent) in July. Meanwhile sales volumes fell in specialist food & drink (-48 per cent)
- 41 per cent of wholesalers reported sales volumes to be up on last year, and 7 per cent said they were down, giving a balance of +34 per cent, beating expectations (+14 per cent). Volumes are expected to grow at a slightly slower pace next month (+23 per cent)
- 31 per cent of motor traders reported sales volumes were up on a year ago, whilst 45 per cent said they were down, giving a balance of -14 per cent, the lowest since November 2013 (-26 per cent). Volumes growth is expected to rebound next month (+26 per cent)