High street sales continued to rise with strong year-on-year growth in the first half of December, ahead of teh Christmas rush, according to the latest CBI Distributive Trades Survey. However, growth is expected to slow slightly in January.
The survey showed that during December, 67 per cent of retailers said sales were higher than a year ago, while just 11 per cent said they were lower, giving a balance of 56 per cent – the highest figure since April 2002. The means there have now been six months of strong sales figures in a row since July.
The sub-sectors with the strongest sales growth were hardware & DIY, clothing and non-specialised retailers such as department stores, and grocers.
The balance for the three month moving average edged higher to +45%.
However, retailers anticipate slower growth next month, with a balance of +35% expecting volume of sales to be higher than a year ago.
The balance for the volume of orders placed to suppliers is 52 per cent, although the balance for next month of 24 per cent suggests a slower rate of growth.
Ian McCafferty, CBI chief economic adviser, said: “Sales on the high street continued to rise strongly compared with a year ago, reflecting a stronger crucial pre-Christmas trading period.
“However, December’s strong survey balance is also likely to capture spending being brought forward, ahead of the January increase in VAT. Indeed, retailers expect sales growth to lose some momentum in the New Year. We remain cautious about prospects for the retail sector further ahead, given ongoing uncertainty over the resilience of consumer spending.”
In motor trades, the volume of sales was also higher than a year ago, with a balance of +15 per cent. However, there are concerns about January with just seven per cent expecting sales to be higher than a year ago and 49 per cent expecting them to be lower, giving a rounded balance of -43 per cent.
Among wholesalers, 19 per cent said the volume of sales rose compared with a year ago, 31 per cent said they fell, giving a rounded balance of -13 per cent. The balance for the three-month moving average was +3 per cent.
However, wholesalers are more optimistic about next month, with a balance of 25 per cent expecting sales to be higher in January than a year ago.
The survey was conducted between 25th November and 8th December, and 121 firms participated.