Retail sales beat expectations as garden centres report stronger August

Retail sales volumes grew in the year to August following last month's fall, according to the latest CBI quarterly Distributive Trades Survey.

The survey of 131 firms, of which 58 were retailers, showed that the volume of sales grew modestly over the year, beating expectations for a further fall this month. However, sales volumes look set to be broadly flat over the next month.

The volume of orders placed upon suppliers fell for a fifth consecutive month although retailers expect them to grow somewhat in the year to September.

While grocers’ sales were broadly flat in the year to August, clothing reported a strong month for sales volumes. Growth in internet sales volumes picked up over the same period, outstripping expectations, with broadly similar growth expected next month. Garden centres and other garden retailers have reported a strong month as good weather continued.

A late summer heatwave has led to strong garden furniture, plants and BBQ sales.

Mappleborough Green Garden Centre in Redditch has seen "about a three-fold increase for the centre plus steady growth in the coffee shop," in the past few weeks after expanding following redevelopment.

Hillier director Chris Francis said August garden centre sales had been "very good", "with nursery stock sales being particularly strong".

Perrywood’s Hannah Powell said: "The first three weeks of August garden centre were up seven per cent compared to last year. This is a similar increase to previous months of 2016 here at Perrywood. We’ve kept well stocked with plants through the summer and as a result sales have been good. Good sales of discounted furniture. Coffee shop similar to last year."

Investment intentions for the year ahead turned positive following the most negative results since 2013 in the previous quarter. Year-on-year employment was again flat in the year to August, although retailers expect a small cut in headcount in September. While retailers anticipate a further small improvement in their business situation, sentiment is improving at a slower rate than over the past year. Average selling prices fell on a year ago, after rising over the first half of this year.

Anna Leach, CBI head of economic analysis and surveys, said: "The summer weather has brought shoppers out onto the high street with retailers reporting that sales growth has risen, outdoing expectations, although firms do expect sales growth to ease next month.

"While the fall in Sterling has boosted visitor numbers to the UK, it is likely to push up the price of imported goods over time which will mean households will be more likely to rein back spending on non-essentials."

Some 35 per cent of retailers said that sales volumes were up in August on a year ago, whilst 26 per cent said they were down, giving a balance of +9 per cent. This was above expectations (-12 per cent), and a marked improvement on the previous month’s balance (-14 per cent) and 25 per cent  of respondents expect sales volumes to increase next month, with 22 per cent expecting a decrease, giving a balance of +3 per cent.

Some 26 per cent of retailers placed more orders with suppliers than they did a year ago, whilst 33 per cent placed fewer orders, giving a balance of -7 per cent. Some 22 per cent of businesses reported that their volume of sales for the time of year were good, whilst 14 per cent said they were poor, giving a balance of +8 per cent. Average selling prices fell (-5 per cent) for the first time since November 2015.

Some 44 per cent of wholesalers reported sales volumes to be up on last year, and 22 per cent said they were down.

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