February retail sales dampen hopes of post-election bounce
Retail sales were broadly flat in February, according to the latest research, dampening hopes that the decisive General Election result has sparked a surge in consumer spending.
The CBI’s monthly distributive trades survey showed that a net balance of one per cent of retailers reported a jump in sales volume in the year to February, and are expected to remain flat in the year to March.
Sales for the time of year dropped to minus 14 per cent, from minus seven per cent the previous year.
A net balance of 13 per cent of retailers reported that orders placed with suppliers fell, and they are expected to decline at a steeper rate next month, the survey found.
However, a separate measure found that investment intentions in the sector saw the largest swing since the survey began in 1983.
CBI principal economist Ben Jones said: “The prospects for a recovery in investment in the retail sector are on the up. This is particularly the case among large retailers, driven by shifts online and the trend for repurposing retail space.
“But the first months of 2020 haven’t brought a tangible change in fortunes on the high street. Conditions remain tough, especially for smaller retailers, and that won’t be changing anytime soon.”
Howard Archer, chief economic advisor to the EY Item Club, added: “While showing marginal improvement, the February CBI distributive trades survey does not really do much to advance the case that the market rise in consumer confidence following December’s decisive election has lifted their willingness to spend.”
Wholesaling sales volumes rose in the year to February, with a net balance of seven per cent of wholesalers reporting an increase. Motor traders also reported strong sales growth this month, rising to 27 per cent from four per cent.