DIYWEEK.net

 

Retail investment intentions lowest in 36 years

Published: 3 June 2019 - Fiona Garcia
Retail sales volumes contracted in all sectors, apart from online retailing in May, as retail investment intentions hit record low
Retail sales volumes contracted in all sectors, apart from online retailing in May, as retail investment intentions hit record low

Retail sales in the year to May fell at the fastest pace since October 2017, as tough trading and Brexit uncertainty result in retail investment intentions seeing a sharp decline in recent months to hit record low, according to the latest quarterly Distributive Trades Survey.

The survey of 90 firms, of which 42 were retailers, also showed that the volume of sales for the time of year were at their poorest since March 2009, but are expected to be broadly in line with seasonal norms next month. The survey revealed that retailers expect sales volumes to pick up next month (+7%), with 26% expecting a rise and 19% expecting a fall

Orders placed on suppliers in the year to May also fell, at their fastest pace in 19 months. This figure is expected to contract again in June, albeit at a slower pace (-8%)

Conditions for retailers have further deteriorated, according to the CBI, with investment intentions for the year ahead reaching their lowest in survey history (since 1983), at -65%; a sharp drop from February (-33%).

Employment also fell on a year ago, for the tenth quarter running and at the fastest pace since August 2009. However, overall, retail businesses expect business conditions to remain broadly stable over the next three months, matching expectations in February.

The only sub-sector which posted a rise in sales during May month was non-store retailing, which was up 49%. However, sales fell in other sub-sectors contracted, including furniture & carpets (-50%) and hardware & DIY (-25%).

Growth in annual internet sales grew at a slightly faster pace in May, up 38%, albeit at a rate still below the long-run average of +47%. Retailers expect similar growth in internet sales in June, with a forecast of +36%.

Elsewhere, wholesalers reported a fall in sales for the first time in almost three years. According to the survey, 35% of wholesalers reported sales volumes to be up on last year and 41% said they were down, giving a balance of -6%.

Meanwhile, average selling prices compared to a year ago grew at a faster pace than last quarter (+60%, compared to +48% in February) and are expected to grow at the same pace next quarter.

While the economy as a whole saw a strong start to 2019, this was at least in part due to pre-Brexit stockpiling. Business surveys indicate that underlying conditions are more subdued.

CBI deputy chief economist Anna Leach said: “This month’s survey paints a dismal picture of business conditions for retailers, who face a grim combination of tough trading conditions, Brexit uncertainty and a burdensome outdated business rates regime, which have collectively pushed investment intentions to a record low.

“Parliament has one more chance to bring a Brexit deal forward and finally resolve this gridlock. Politicians must lock down a deal as soon as possible, whether through indicative votes or the Withdrawal Agreement. Business and the country need an urgent resolution to this mess.”

 

Comments


(Your email address will not be published)
2 + 3 =  
Already Registered?
Sign In
Not Yet Registered?
Register
Printable View E-mail Bookmark
*

Latest reader comments

re: Latest update on Green Homes Grant and implications for homeowners and landlords

John Hart
After applying for a green homes how long will it take for a decision? thanks...

re: SX Rainproof Exterior Caulk

Wally
I need the exterior sx rain resistant caulk! Can't get it anywhere so please help! How can I order it? Need it yesterday...

re: BCT can replicate any material in a ceramic tile

Christina Tiritanou
Not sure if you can help as I require a tile which has the measurements of 6”x 6”? Thank you....

re: Latest update on Green Homes Grant and implications for homeowners and landlords

colin thompson
SarahVery clear and helpful information.Thanks...

Most read stories

https://www.diyweek.net/retail-investment-intentions-lowest-in-36-years