A survey of retailers out of the UK is UGLY.
From CBI.org.uk, here’s the announcement.
Retail sales fall at their fastest rate for 13 months – CBI
First fall in annual sales since April 2012 – showing weakening sales since start of year
29th May 2013
Retail sales fell at their fastest rate in more than a year in May, according to the CBI’s latest monthly Distributive Trades Survey.
The survey of 69 retailing firms saw the steepest fall in annual sales since January last year – showing growth in retail activity has weakened persistently during 2013.
Overall sales volumes remained below average for the time of year and orders fell faster than at any point since November 2011.
The detailed findings show that grocery sales were broadly flat on a year ago, reversing last month’s rise. There were falls in sales across most other sub-sectors, including clothing and footwear.
Retailers are reporting a slightly brighter outlook, expecting sales to rise modestly next month and the business situation to improve over the next quarter.
But firms are planning to scale back their investment for the year ahead – with investment intentions now the weakest since the start of last year.
Barry Williams, Asda Chief Merchandising Office for Food and Chair of the CBI Distributive Trades Survey Panel said:
“Retail sales growth has weakened since the start of the year as households continue to feel the pinch, with wages failing to keep pace with the cost of living.
“There is positivity from retailers this month, however, with sales expected to rise in the coming months.”
The survey was conducted between 24th April and 15th May 2013.
- 23% of firms reported that sales volumes were up on a year earlier and 33% said they were down – the resulting balance of -11% was the lowest since January 2012 (-22%), disappointing expectations last month of a much slower decline (-6%).
- 8% reported sales volumes to be above average for the time of year and 25% below – with the resulting balance of -17% below expectations (-11%).
- 21% placed more orders with suppliers than they did a year ago and 46% fewer, with the resulting balance of -25%, down on expectations of -15% and the lowest since November 2011 (-25%).
- Grocers’ sales were broadly flat (-3%) after a rise last month (+20%). Other sub-sectors reporting year-on-year falls included clothing (-21%); footwear & leather (-11%); specialist food & drink (-45%); non-store (-4%; the first fall since August 2011); and durable household goods (-67%). Sales of furniture & carpets (+71%) and recreational goods (+57%) rose.
- Sales volumes are expected to rise modestly in June, with 29% of firms expecting an increase versus 20% predicting a fall, resulting in a rounded balance of +10%.
- 16% of retailers expect business conditions to improve over the next three months and 7% expect them to deteriorate, giving a rounded balance of +10% – similar to the optimism expressed in the February quarterly survey (+12%).
- 41% of retailers are planning to cut back on investment over the next year relative to the past twelve months, compared with 18% planning to raise capital spending – the balance of -23% is the lowest since February 2012,
- 33% of retailers reduced employment in the year to May and 33% increased employment, giving a rounded balance of 0% – a slight improvement on the year to February (-7%) and in line with expectations (-1%).
The survey also heard from 57 wholesalers and 11 motor traders.
28% of wholesalers reported sales volumes to be up on last year and 34% said they were down, giving a balance of -6% – in line with expectations and driven in part by the fastest decline in food & drink sales since February 2009. However, wholesalers expect sales to rise solidly next month (+22%) and expect to raise investment marginally in the year ahead (+5%).
56% of motor traders reported sales volumes to be up on a year earlier and 37% said they were down, giving a rounded balance of +18% and undershooting expectations of stronger growth (+53%).
1. Firms responding to the Distributive Trades Survey (DTS) are responsible for a third of employment in retailing. The survey includes measures of sales activity across the distributive trades. It was first introduced in 1983 and the retail results form the UK component of the EC survey of retail trades.
2. The survey was conducted between 24th April and 15th May. 137 firms took part, of which 69 were retailers, 57 were wholesalers and 11 motor traders.
3. A balance is the difference between the percentage of retailers reporting an increase and those reporting a decrease.
4. The latest Asda Income Tracker was published on 27th May 2013 – showing household spending power at a 12 month low as wage growth sees steepest decline since the start of 2008: