Retail sales growth “slows in January”

The pace of retail sales growth slowed in the year to January, according to the first monthly Distributive Trades Survey of 2013 from business group the Confederation of British Industry (CBI).

The survey, covering the first fortnight of January, shows 41% of retailers reported increased sales volumes compared to a year ago and 24% reported a fall. The resulting balance of +17%, although better than the expected 10%, shows a similar picture to December (+19%) but falls short of the robust growth in October (+30%) and November last year (+33%).

Sales volumes in January were broadly in line with the average for the time of year (+1%) for the first time since April 2012 (0%).

But retailers expect sales to dip slightly below seasonal norms once again in February (-7%) and are predicting year-on-year sales growth to slow slightly further in the next month (+13%), says the CBI.

In a period which saw the disappearance of familiar High Street names such as Jessops and Comet, as well as music retailer HMV enter administration, it seems that the grocery trade which is holding up the rest of the sector.

The survey shows that grocers (independent and multiple) recorded their ninth successive month of rising year-on-year sales (+41%) – holding up total retail sales growth, and partially compensating for falling volumes and weakening growth rates elsewhere, said the CBI.

Wholesalers reported broadly flat sales on a year ago (-3%), down on expected growth of 12%. Food and drink sales continued to rise on a year ago (+34%) but this was offset by falling sales in other sectors. Specialist food and drink sales fell at their fastest (-32%) since last October, indicating that economic uncertainty continues to put consumers off buying non-essential items and pushing them to trade down.

The survey showed retailers’ orders with suppliers rising on a year ago for a fifth consecutive month (+15%) but orders are expected to plateau in February (+1%). Stock levels were slightly more than adequate relative to expected demand (+5%), falling back for the second month running.

The January 2013 CBI monthly Distributive Trades Survey was conducted between 2 and 16 January 2013. 127 firms replied, of which 65 were retailers, and 56 were wholesalers.

Meanwhile Diageo Great Britain, the UK’s biggest drinks company, this week posted its sales results. Although sales were flat compared to the previous year, Diageo said that its strategy of “positive price mixing” – essentially, having strong brands at every price point from budget to super-premium – was paying dividends in a “very tough” market.

Among its most successful brands were Red Stripe and Captain Morgan rum, the company said, with a 1% grown in Red Stripe offsetting a slight decline in Guinness sales. The company is investing millions of pounds in marketing three of its most important brands, Guinness, Baileys and Smirnoff, through 2013.

Diageo’s overall share of the on-and-off trades is 32.9%, according to Nielsen.

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