Retail growth strong after January sales: CBI

Retailers reported strong growth in sales volumes in January, according to the CBI's monthly Distributive Trades Survey released today.

Volume growth exceeded expectations and sales were well above average for the time of year, the CBI said.

More than half (53%) of respondents said sales were up on a year ago while 15% said they were down. The balance of plus 38 is the highest since April 2002.

The underlying trend edged upwards and is now at its strongest level since June 2002. Strong sales growth is expected to continue into February, although at a slightly slower rate than reported in January.

A spokesperson said: "Anecdotal evidence suggests that this strong volume growth followed a high degree of discounting in the high street throughout January. Year-on-year growth is also likely to have been exaggerated by the comparison with January 2003 when sales were disappointing."

The survey indicated that most retail sectors saw strong growth in January, with the exception of clothing retailers who reported a second successive month of falling sales. Booksellers and stationers reported the strongest performance since March 1998, and sales of furniture and carpets grew at the fastest rate for more than three-and-a-half years. Grocers and stores selling durable household goods, which include TVs, DVD players, fridges and washing machines, reported another month of robust growth.

Motor traders reported a sharp drop in sales, although the decline was less severe than reported in December.

Ian McCafferty, CBI Chief Economic Adviser, said: "The survey shows that many retailers had a better January than they were expecting. However trading announcements over the last month suggest that performance has been particularly store or even goods-specific.

"Overall the retail sector looks to be healthy, but reports of price discounting suggest that competition remains intense and firms will be hoping that the Bank of England continues its gradualist approach to raising interest rates when it meets tomorrow."

(gmcg)