Festive Lift For Retailers As Sales Stabilise In December

Festive Lift For Retailers As Sales Stabilise In December

Retail sales volumes recovered after two months of sharp declines to stand broadly flat for the year to December, with retailers viewing sales as good for the time of year to the greatest extent since March 2019. Orders placed also broadly stabilised after 13 consecutive months of decline.

The CBI’s latest monthly Distributive Trades Survey – which aggregated the views of 143 businesses, including 81 retailers – also found that internet sales grew at an above average pace for the third consecutive month

However, the survey – which was in field from November 23 to December 14, covering the latter part of the second English lockdown and the return to tiered restrictions – revealed significant divergence across sub-sectors and found sales volumes are expected to fall again next month.

While grocers, furniture vendors and retailers of ‘other normal goods’ (cards, flowers and jewellery, etc) saw strong growth; clothing, footwear and department stores continued to report that volumes were lower than a year earlier.

Looking ahead, overall retail sales volumes and orders placed with suppliers are expected to fall sharply in the year to January, with sales expected to be below seasonal norms.

Stock levels were viewed as broadly adequate for expected sales, but the balance of responses was the lowest in more than a decade.

Ben Jones, Principal Economist at the CBI, said:

“It says something about the challenges the retail sector has faced during 2020 that stable sales volumes in the run-up to Christmas were seen as a good result for the time of year.

The new year looks set for an unpromising start, with retailers anticipating a sharp fall in sales in January. An expected deterioration in the labour market will likely weigh on household spending, even assuming the roll-out of Covid-19 vaccines paves the way for a gradual lifting of restrictions as the year progresses.

“Government support measures, such as business rates relief and the extended furlough scheme, have been immensely helpful for retailers. To assist with planning, a priority now should be to avoid any sudden cliff-edges as schemes are wound down.”

Key findings (Figures are balance statistics unless otherwise stated):

Retail

  • Retail sales volumes stabilised in the year to December (balance of -3%, from -25%). A sharp fall in sales (-33%) is expected in the year to January.
  • Orders placed on suppliers were broadly flat (balance of -4%, from -10%), the least negative balance in 14 months. Orders are expected to fall again next month (-21%).
  • Internet sales remained strong in the year to December (balance of +51%, from +55%; compared with the long-run average of +46%) and are expected to remain so next month (+56%)
  • Stocks were seen as broadly adequate for expected sales (balance of +3%, from +14%), however this is the lowest balance since September 2009. Relative stock levels are expected to increase next month (+8%).

Wholesalers and motor trade

  • Wholesale sales grew at the strongest pace since March (balance of +19%, from -12%).
  • In contrast, motor traders reported the sharpest fall in volumes since June (balance of -44%, from -28%).
  • Both sectors expect sales to fall in the year to January (-13% and -43% respectively).

 

21 December 2020

For further information, please visit the CBI website

All articles on this news site are submitted by registered contributors of SuffolkWire. Find out how to subscribe and submit your stories here »