Retail sales volume continues to improve following sharp declines
By Iain Gilbert
Date: Monday 21 Dec 2020
(Sharecast News) - UK retail sales volumes improved following two months of sharp declines to stand broadly flat for the year to December, with retailers indicating sales were "good for the time of year" to the greatest extent since March 2019.
According to the Confederation of British Industry's latest monthly distributive trades survey, retail sales volumes slipped 3%, improving from a 25% drop in the prior reading, as orders placed broadly stabilised after 13 consecutive months of decline and internet sales grew at an above-average pace for the third consecutive month.
However, the survey also revealed significant divergence across sub-sectors and found sales volumes were expected to fall again next month.
Grocers, furniture vendors and retailers of "other normal goods" saw strong growth, while clothing, footwear and department stores continued to report lower volumes than a year ago.
Looking ahead, the CBI said overall retail sales volumes and orders placed with suppliers were expected to fall sharply in the year to January, with sales expected to be below seasonal norms.
Stock levels were viewed as broadly adequate for expected sales, however, the balance of responses was the lowest in more than a decade.
CBI economist Ben Jones said: "It says something about the challenges the retail sector has faced during 2020 that stable sales volumes in the run-up to Christmas were seen as a good result for the time of year.
"The new year looks set for an unpromising start, with retailers anticipating a sharp fall in sales in January. An expected deterioration in the labour market will likely weigh on household spending, even assuming the roll-out of Covid-19 vaccines paves the way for a gradual lifting of restrictions as the year progresses."
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