Retail sales growth slows for third consecutive month

UK retail sales growth slowed for the third month in a row, according to CBI’s Quarterly Distributive Trades Survey.

A growth in sales volumes was recorded in the grocers, hardware and DIY, and non-store goods (i.e. internet and mail order) sub-sectors. However, sales fell in clothing, footwear and leather, department stores, and furniture and carpets.

Sales were up 4%, which is slightly above average for the time of year in February, with the balance a little above the long-run average (-1%).

Growth in average selling prices was above the long-term average in the year to February, but eased compared with the previous quarter. Similar price growth is expected in the year to March.

Also, employment in the retail sector continued to decline for the fifth quarter in a row but at the slowest pace in a year.

For the first time since November 2016, retailers in the survey said that they expected their business situation to improve over the next three months. Some 34% of retailers also said they expected sales volumes to increase next month.

Anna Leach, CBI head of economic intelligence, said: “While trading conditions remain tough, it’s encouraging to see retailers’ investment intentions improving to their highest since August 2015, in addition to signs of renewed business optimism for the first time in more than a year.

“With labour-intensive businesses such as retailers finding it increasingly difficult to find workers, agreeing a jobs-first transition between the EU and the UK, in writing, by the end of March would provide some much-needed certainty.”