Retail sales dropped slightly below normal in the year to February, according to the CBI’s latest quarterly Distributive Trades Survey.
The survey of 124 firms, consisting of 68 retailers, showed that retail sales growth slowed slightly in the year to February. Meanwhile, orders placed on suppliers were unchanged. But expectations for March are the weakest since 2013, with sales expected to be flat.
Respondents expect a decent improvement in business conditions (which considers recent trends in sales, orders and profitability) over the next three months. Average selling prices crept up for the first time in three quarters, easing pressure on retailing margins. And although recruitment growth slowed, it remained well above average rates with a similar rise expected next month.
But retailers now plan to slightly scale back investment spending in the year ahead, following two quarters when firms expected to raise capital spending.
Meanwhile, grocers’ expectations for growth for the month ahead fell to their weakest in nearly three years, as tough trading conditions continue to exert pressure on the sector.
CBI director of economics Rain Newton-Smith said: “Overall, conditions remain challenging for retailers. Although sales have continued to grow and optimism has risen, expectations for sales growth are lacklustre and retailers are still wary of investing. And unreformed business rates are making it tougher for retailers to open up new shops on the high street.
“But retailers still stand to benefit from the low level of inflation and strong job creation across the economy, which should continue to support household spending.”