Retailers get sales boost in Christmas run

Low sales are predicted for the high street in January. Picture: Steven Scott Taylor
Low sales are predicted for the high street in January. Picture: Steven Scott Taylor
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  • ‘Black Friday’ key driver of increase
  • Grocers report ‘solid growth’
  • But outlook for January is weak
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High street sales growth accelerated in the year to December, but the outlook for sales in January is the lowest in more than three and a half years, a survey from the CBI employers lobby group revealed yesterday.

City economists said the latest retail figures were “decent”, but noted the industry’s caution about the beginning of next year.

The latest CBI monthly distributive trades survey follows the recent Office for National Statistics report that said retail sales volumes jumped 1.7 per cent month-on-month and 5 per cent year-on-year in November.

The survey said 43 per cent of retailers surveyed said that sales volumes were up in December on a year ago, whilst 24 per cent said they were down, giving a balance of +19 per cent.

This was an increase on the previous month (+7 per cent), but below expectations (+31 per cent). A total of 22 per cent of retailers expect sales volumes to increase in the year to January, with 14 per cent expecting them to decrease, giving a rounded balance of +9 per cent – the lowest since May 2012 (-6 per cent).

Barry Williams, the CBI distributive trades chairman and Asda’s chief customer officer, said: “It’s no surprise sales have recovered as we head into the final shopping days of the Christmas season.

“It would be ideal if the industry could keep that momentum into the New Year but retailers know 2015 was tough, and they’re expecting 2016 to start in much the same vein.

“Nevertheless, retailers are helping to make the pound in customers’ pockets go further, and low fuel prices should give an additional boost to consumer spending through the New Year.”

Yesterday’s report also said that 34 per cent of retailers placed more orders with suppliers in December than a year ago, and 26 per cent placed fewer, giving a balance of + 8 per cent. But orders are expected to be flat next month.

The CBI’s survey was carried out between 26 November and 14 December, so critically included Black Friday weekend. Following Black Friday, internet sales volumes rose at their quickest pace since April, with the pace of growth expected to hold broadly steady in January.

Among the retail sub-sectors, grocers saw solid growth in the run-up to Christmas, rebounding from November. Another strong performance was reported in the clothing sector, but footwear and leather sales growth fell.

Wholesaling and motor traders saw robust growth in the year to December.

Howard Archer, chief UK economist at IHS Global Insight, said: “Retailers hope this will be a good Christmas for them, given consumers’ improved purchasing power, and the December CBI survey and November retail sales data suggests that their hopes could be largely realised.”