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Hardware and DIY Sales Receive June Boost

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Retail sales grew at the fastest pace since September 2017 in the year to June, according to the latest CBI monthly Distributive Trades Survey. 

The survey of 106 firms, consisting of 45 retailers, also revealed that sales volumes were well above average for the time of year, following three months when they were below seasonal averages. Additionally, the survey reported a jump in growth in the volume of orders placed on suppliers. 

Retail sales growth was fairly broad-based across retail sub-sectors, with the pick-up in June driven particularly by a rise in non-store sales, department stores, durable household goods, and “other” normal goods. Grocers and hardware & DIY stores also fared well, reporting robust sales. Meanwhile, carpet & furniture stores and clothing retailers saw a drop in sales volumes in the year to June.

In more positive news for the retail sector, internet sales grew at a faster rate than the long-run average for the first time since January 2018 (although retailers expect growth to ease slightly in the year to July).

Looking ahead, retailers expect growth in sales volumes and orders placed on suppliers to ease in the year to July.  

Elsewhere in the distribution sector, wholesalers reported flat sales volumes in the year to June (breaking 22 months of uninterrupted growth) – although firms expect growth to pick-up again in July. Motor traders continued to report modest sales volume growth, and they expect growth to accelerate sharply in July.

Anna Leach, CBI Head of Economic Intelligence, said:

“Higher-than-average temperatures seem to have had a positive impact on shoppers, with retailers benefitting from above-average seasonal sales and improved order volumes growth. While today’s findings will bring some summer cheer to retailers, underlying conditions for the sector remain challenging – household spending remains under pressure from the slow recovery in real wage growth and the sector is still grappling with key structural changes like digital transformation.”   

Key findings

Retailers:

  • 43% of retailers said that sales volumes were up in the year to June, whilst 10% said they were down, giving a balance of +32%
  • 32% of respondents expect retail sales volumes to increase in the year to July with 14% expecting a decrease, giving a balance of +18%.
  • 34% of retailers placed more orders with suppliers than they did a year ago, while 13% placed fewer, giving a balance of +20%
  • 30% of retailers said the volume of sales was good for the time of year, with 11% saying they were poor, giving a balance of +19%. Retailers expect seasonal sales volumes to improve in the year to July, with 30% anticipating good sales and just 5% expecting poor sales – giving a balance of +25%.
  • Sales volumes saw their strongest growth across non-specialised stores (+45%), non-store (+79%), durable household goods (+33%), and other normal goods (+6%). Meanwhile, sales volumes expanded in grocers (+65%), footwear & leather (+28%).
  • Growth in internet sales volumes increased sharply in the year to June (+52%, from +35% in May). Online sales are expected to ease somewhat in the year to July (+48%).

Source: Insight DIY Team & CBI Press Release

Access the original article here.

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29 June 2018

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