Retail sales slow for third consecutive month

Retail sales growth slowed for the third month in a row in the year to February, latest figures show.

According to the latest CBI Quarterly Distributive Trades Survey, orders placed on suppliers were broadly flat over the year, but are expected to pick up slightly next month.

Within the retail sector, growth in sales volumes was recorded in the grocers, hardware & DIY, and non-store goods (i.e. internet and mail order) sub-sectors. Meanwhile sales fell in clothing, footwear and leather, department stores, and furniture and carpets.

Growth in average selling prices remains above the long-term average in the year to February, but eased compared with the previous quarter. Similar price growth is expected in the year to March.

Alongside slower sales growth, employment in the retail sector continued to decline for the fifth quarter in a row, but at the slowest pace in a year.

But for the first time since November 2016, retailers expect their business situation to improve over the next three months. And investment intentions for the year ahead strengthened further, hitting their highest since August 2015.

Looking at growth in the economy more broadly, momentum was modest for most of 2017. Much of this reflected the weakness in household income, which is a factor behind weaker retail sales growth over the past year.

Anna Leach, CBI head of economic intelligence, said: “While trading conditions remain tough, it’s encouraging to see retailers’ investment intentions improving to their highest since August 2015, in addition to signs of renewed business optimism for the first time in more than a year.

“With labour-intensive businesses such as retailers finding it increasingly difficult to find workers, agreeing a jobs-first transition between the EU and the UK, in writing, by the end of March would provide some much-needed certainty.”

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