Retail sales growth picks up for first time in five months

Retail sales grew for the first time since November 2018 in the year to April, according to the latest monthly Confederation of British Industry (CBI) Distributive Trades Survey.

The survey of 110 firms, of which 55 were retailers, showed that sales volumes rose for the first time in five months, likely supported by the later timing of Easter this year. Sales remained above average for the time of year.

Some 49% of retailers said that sales volumes were up in April on a year ago, whilst 36% said they were down, giving a balance of +13%. According to the CBI this was “broadly in line with expectations” (+15%).

Additionally, 38% of respondents expect sales volumes to increase next month, whilst 15% expect a decrease, giving a balance of +23%. Despite 35% of retailers saying that their volume of sales for the time of year were good, 25% said they were poor, giving a balance of +10%.

The CBI said the picture for sub-sectors within retailing was mixed, with grocers and other normal goods (e.g. jewellery, flowers) being the two primary drivers being this month’s sales growth.

But while grocers returned to growth this month, after seeing broadly flat sales in March, the rise in volumes was still below the long-run average. Furthermore, other sectors fared worse, with sales falling notably in clothing and department stores.

Rain Newton-Smith, CBI chief economist, said: “It’s encouraging to see retailers with more of a spring in their step than in recent months. The recent pick up in real wages is a welcome support to the sector, making the pound in people’s pockets stretch that bit further.

“However, this month’s sales growth will have been distorted by the later timing of Easter, and falling sales in clothing and department stores underline how challenging underlying conditions remain.

She added: “The Brexit extension means an economic crisis has been avoided, for now. However, uncertainty continues to drag on consumer confidence, and many retailers report an impact on their sales. Politicians now owe it to the country – its businesses and people – to come together in a total spirit of compromise, setting aside all party political lines, and agree a way forward to avoid a no deal Brexit.”

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