Chelmsford's High Street. |
The festive season has lost some of its sparkle
for retailers, with growth in sales on the UK high street slowing in December,
the CBI said today.
The Confederation of British Industry is the UK
biggest business lobbying group.
Responding to the CBI’s latest monthly Distributive Trades Survey during the
first two weeks of December, 36% of retailers reported an increase in volume of
sales compared to a year ago, and 17% a decrease. The resulting balance of +19%,
though broadly in line with the long-run average (+21%), matched neither the
stronger increases in sales volumes seen in the previous two months (+30% and
+33%), nor retailers’ expectations (+25%). As a result, retailers considered
sales volumes to be below average for the time of year (-18%), disappointing
expectations that they would be in line with seasonal norms (-1%).
In contrast to slowing sales growth, orders placed by retailers upon suppliers
rose (+13%) at a similar pace to last month year-on-year (+16%).
Sales growth is expected to continue losing steam next month, with retailers
expecting a slower rise once again in the year to January (+10%), while orders
placed on suppliers are expected to be flat in the coming month (0%).
Stocks levels fell back relative to expected demand (+9%), with stock adequacy
at its lowest in three months. A similar degree of stock sufficiency is expected
next month (+10%).
Looking in more detail at the retail sectors, grocers recorded their eighth
consecutive month of rising year-on-year sales (+42%), while clothing also saw
sales growth pick up (+39%). A few other sectors reported a rise in sales,
including chemists (+23%) and furniture & carpets (+42%), but at a slower rate
than in November. The picture was less buoyant for shops selling big-ticket
items for the home (durable household goods: -58%), while shops selling footwear
& leather also saw falling sales (-9%) for the second month running.
Anna Leach, CBI Head of Economic Analysis, said: “This month’s survey hasn’t
quite provided the Christmas cheer that retailers anticipated, with sales growth
falling short of expectations.
“Clearly, weak spending power and uncertainty over the economic outlook are
likely to remain key risks to the retail sector in 2013.”
Judith McKenna, chair of the CBI Distributive Trades Panel and Asda chief
operating officer, said: “This latest data covers the period to the middle of
December and we should take heart that sales on the high street have held up
during the early crucial Christmas shopping period. However, on-going economic
fragility is maintaining the squeeze on household incomes, and it’s notable that
sales are below par for the festive season.
“So while families are making their budget stretch as far as possible for the
Christmas season, the Christmas spending spirit can only go so far. In reality,
sales growth has actually slowed since the Autumn and retailers are expecting a
further slowdown in the New Year.”
This month, the wholesale sector saw its fastest year-on-year sales growth
(+53%) since September 2007 (+67%), greatly exceeding wholesalers’ expectations
of broadly flat growth (+3%). A further, but more modest rise in sales is
expected in the month ahead (+12%).
Meanwhile, motor traders reported flat sales volumes (0%), in line with
expectations (-3%), after two months of year-on-year growth. However, sales are
expected to rise once again in January (+18%).
The December 2012 CBI monthly Distributive Trades Survey was conducted between
29th November and 12th December. 108 firms replied, of while 63 were retailers,
35 were wholesalers, and 8 were motor traders.
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