Retailers boosted by later summer sales, says CBI

The warm weather and a later start to the summer sales gave retailers an "unexpected boost" in July, according to the CBI's latest monthly Distributive Trades Survey published today (Wednesday).

Retailers had expected July to show the same modest sales growth as June but in fact sales grew at the fastest rate since April 2002, the CBI said.

Fifty-four per cent of respondents said sales were up compared with the same month last year – while 27% said they were down. The balance of plus 27% contrasts with plus 10% growth recorded in June.

Sales were also further above average for the time of year than they have been at any time since May 2002. Retailers' expectations for growth over the month ahead were the highest since last December.

Despite greater retail sales, stocks remained at a similar level to June because orders placed on suppliers also increased. Retailers of footwear and leather goods saw the biggest year-on-year increases in sales followed by those selling groceries and durable household goods such as fridges and hi-fi. The biggest annual declines in sales were for specialist foods, furniture and carpets, according to the report.

Doug Godden, CBI Head of Economic Analysis, said: "Retailers have had a surprisingly good July. Warm weather and the later start to the summer sales have particularly helped sales of food and drink and electrical goods. The latest cut in interest rates may also have helped and, more generally, consumer confidence appears to be holding up well."

Motor traders, however, have now seen sales down year-on-year in every one of the last 12 months but there were "signs of improvement".

The rate of decline was much lower than in the spring and, for the third consecutive month, sales fell by less than expected. Only a small drop in sales is expected in August and July sales were only modestly below average for the time of year, said the CBI.

(GMcG)