CBI finds some cheer in December sales

Retail sales volumes grew in the year to December for the first time in seven months, though sales were considered poor for the time of year, the CBI has found.

Publishing its latest monthly Distributive Trades Survey, which covers the first two weeks in December, the business organisation said retailers did not expect December’s modest sales growth to continue into the New Year, with annual sales volumes falling again in January.

While 41 per cent of companies said sales rose on a year ago in December, 32 per cent reported a fall, giving a balance of +9 per cent. This was better than expected, and the first year-on-year sales growth since May (+18 per cent).

However, volumes of sales were poor for the time of year, with a balance of -16 per cent well below the long-run average. The three-month moving average, which smooths out monthly peaks and troughs, was negative for the fifth month running (-7 per cent) and is expected to remain so in January.

Grocers saw their sales volumes rise on a year ago (+52 per cent), as did recreational goods, which includes sports equipment, toys and games (+44 per cent) and the non-store category (+91 per cent), which takes in mail order and online. Non-specialised retailers, such as department stores, posted better sales this month (+1 per cent) following four months of decline.

Sales volumes fell on a year ago, however, for all sellers of big ticket durable household goods (-100 per cent), which include washing machines and fridges. Hardware & DIY stores fared little better (-70 per cent).

Judith McKenna, Chair of the CBI Distributive Trades Panel and ASDA Chief Financial Officer, said: "Early discounting helped retailers add a little extra sparkle to their sales in December, although the reprieve appears to only be temporary as they don’t expect sales to continue to grow into January.

"Consumers are continuing to hold off on purchasing big ticket items, including durable household goods, preferring to use their hard-earned cash to stock up for Christmas dinner and all important gifts for the family."

The volume of orders placed on suppliers was broadly flat (-4 per cent) on a year ago in December, having fallen fast in November (-24 per cent).

Among wholesalers, 52 per cent saw sales volumes rise, while 9 per cent reported a fall, giving a balance of +42 per cent. Sales are expected to be broadly flat in January (-2 per cent).

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