Retail sales volumes increased at a better than expected rate in January driven by “strong” growth in the grocery sector, but the pace of growth slowed.
According to the CBI Distributive Trades Survey, 41% of retailers reported increased sales volumes compared to a year ago and 24% reported a fall. The balance of 17% was better than the forecast 10%.
The balance of retailers expecting year-on-year sales growth to slow slightly was 13%.
Supermarkets posted a ninth successive month of rising year-on-year sales. The performance “partially” offset falling volumes and weak growth in other categories. Clothing sales growth was at its lowest level since last August.
CBI Distributive Trades Panel chair and Asda chief operating officer Judith McKenna said: “Despite mixed news from the high street over the last few weeks, strong sales growth in the grocery sector has added a touch of sparkle to overall retail sales.
“However, we are far from out of the woods. With tough trading conditions and subdued consumer spending adding to the uncertain economic picture, retailers will continue to face tough market conditions in the coming months.”
Retailers’ orders with suppliers have grown on a year ago for the fifth consecutive month, with a balance of 15%, but orders are expected to plateau in February.
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