High-street sales fall in January as shoppers rein in spending across the board
Retail sales fell in the year to January, after modest growth last month, and sales were considered poor for the time of the year, the CBI said.
According to the latest monthly CBI Distributive Trades Survey covering the first two weeks in January, 44% of retailers saw sales volumes fall on a year ago, while 22% reported a rise, giving a balance of -22%. This was the lowest since March 2009 (-44%), but was broadly in line with expectations (-18%).
Retailers reported sales were disappointing for the time of year (-20%) and orders were also down (-14%), with firms expecting levels to fall again next month (-23%). Stock levels remained constant, but fairly low, in line with recent months (+10). Retailers expect annual sales volumes to continue to fall in February, albeit it at a slower pace than this month (-10%).
There was a mixed picture across the sub-sectors, but with most reporting a fall in sales volumes on a year ago, including hardware & DIY (-80%), durable household goods (-100%) and non-specialised retailers such as department stores (-34%). Grocers saw a modest increase in sales (+6%), following a much stronger trading period in December (+52%). The non-store category, which includes online and mail-order, performed well (+50%).
Ian McCafferty, CBI Chief Economic Adviser, said:
“Shoppers have reined-in spending across the board at the start of the New Year after taking advantage of early discounting last month, which boosted pre-Christmas sales.
“Family budgets are under continuing pressure with inflation still high and wage increases modest.
“Consumers are still holding off particularly from buying big ticket items like washing machines and fridges. Online and mail order sales were the only areas that performed well in January, but growth was still down on last month.”
Among wholesalers, 59% saw sales volumes rise, while 22% reported a fall, giving a rounded balance of +36%, exceeding expectations of -2%. Sales are expected to increase again next month (+24%).
Motor traders saw sales volumes fall for the 13th consecutive month (-9%), and a similar decline is expected next month (-12%).
Note to Editors:
1. Firms responding to the Distributive Trades Survey (DTS) are responsible for a third of employment in retailing. The survey includes measures of sales activity across the distributive trades. It was first introduced in 1983 and the retail results form the UK component of the EC survey of retail trades. It is an accurate early indicator of monthly retail sales.
2. The survey was conducted between 3 and 17 January 2012. 135 firms took part, of which 75 were retailers, 46 were wholesalers and 14 motor traders.
3. A balance is the difference between the percentage of retailers reporting an increase and those reporting a decrease.
4. The CBI is the UK's leading business organisation, speaking for some 240,000 businesses that together employ around a third of the private sector workforce. With offices across the UK as well as representation in Brussels, Washington, Beijing and Delhi, the CBI communicates the British business voice around the world.