By Lea Pachta

Compared with a year earlier retail sales have grown for a third consecutive month, and the high street expects a similar increase in May, the CBI said today.

Responding to its latest Distributive Trades Survey, 43% of retailers said that sales volumes in early April were higher than they were over the same period in 2009, while 30% said they were lower. The resulting balance of +13% matched that in March and was broadly in line with businesses’ expectations. A balance of 17% of retailers anticipates year-on-year growth in May.

The three month moving average of sales volumes stayed positive for the sixth month running (a balance of +16%) and is projected to stay at the same level in May.

A net 11% of retailers described sales as poor for the time of year, although they are expected to be more broadly in line with seasonal norms in May (+3%).

There was little change in the volume of orders placed on suppliers (+1%), and a balance of 8% of firms expect orders to grow next month.

A net 6% of retailers said that stock levels were more than adequate to cover expected demand. In May, stocks are forecast to be broadly in line with predicted sales.

Looking at the individual retail sectors: grocers, footwear & leather shops and durable household goods retailers reported strong annual sales growth. Clothing shops and furniture & carpet retailers saw a much slower pace of sales growth by comparison. And hardware, china & DIY sales stabilised after three months of sharp falls.

Andy Clarke, Chairman of the CBI Distributive Trades Panel, and Chief Operating Officer of Asda, said:

“Spring has landed on the high street with some modest but welcome sales growth, and that improvement is expected to carry on into early May.

“Grocers and shoe shops fared reasonably well in April, and the lift in the housing market seems to have fed through to sales of white goods and furniture.

“However, the UK economy remains in a fragile place, and last week’s higher unemployment figures will have unsettled many shoppers.”

Sales volumes in the wholesale sector grew rapidly (a balance of +46%), despite flat expectations (-2%). Sales are predicted to grow solidly again in May (+42%). Industrial materials wholesalers reported very strong sales growth, though the agricultural machinery and electrical installation materials sectors had a difficult month. After heavy sales falls in March, volumes stabilised for builders’ merchants and durable household goods wholesalers.

Motor traders’ sales volumes fell for the fourth consecutive month (a balance of -37%), and against expectations of rapid growth. A similar decline in sales is expected next month (-44%). The fall in overall volumes was driven by another drop in vehicle sales, while parts & accessories vendors reported a third month of growth.

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