Retail sales continued to grow in the year to January, according to latest figures from the CBI but shopkeepers believe there is more pain to come as consumers continue to tighten their belts.
The business body’s monthly Distributive Trades Survey showed more than 40% of retailers saw increased sales volumes compared to a year ago, although just fewer than a quarter reported a fall.
Grocers were among the top-performers, with climbing food prices ensuring growth in the market and more than compensating for falling volumes of sales.
Clothing sales remained stunted, while specialist food and drink fell off following a strong period marked by festive “treats”. Sales of big ticket household items also continued their downward trajectory.
However, the returns fall some way short of the optimism seen during periods of “robust growth” in October and November and despite the collapse of chains like HMV, Jessops and Blockbuster.
Sales volumes in early January were in line with seasonal norms, suggesting bargain-hunters were taking advantage of January sales.
However, stores expect sales to fall once again in February and are predicting year-on-year sales growth to slow further in the next month.
Judith McKenna, chairwoman of the CBI panel responsible for the research and chief operating officer of supermarket giant Asda, said the result showed stores were still in trouble.
“Despite mixed news from the high street over the last few weeks, strong sales growth in the grocery sector has added a touch of sparkle to overall retail sales,” he said.
“However, we are far from out of the woods. With tough trading conditions and subdued consumer spending adding to the uncertain economic picture, retailers will continue to face tough market conditions in the coming months.”
Retail orders placed with supply firms rose for a fifth consecutive month but are expected to plateau in February. Stocks levels were said to be adequate relative to demand but fell back for the second month running. Wholesalers reported a broadly flat trend, while motor traders disappointed, most reporting a sales drop on the previous year.