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The UK retail sector is expected to see a boost in sales next month, with a predicted 9% increase, according to the Confederation of British Industry (CBI). This marks the first positive growth expectations since September 2022 and is a positive sign for the industry after a challenging winter.
The CBI’s Distributive Trends Survey, which was based on responses from 135 companies including 48 retailers, revealed that sales volumes for the retail sector were broadly unchanged in the year to March, indicating a degree of stability. Retailers judged sales in March to be good for the time of year, with a 12% growth from 6% in February.
However, retailers are still facing challenges. Labor shortages continue to be a concern, and retailers are struggling to fill job vacancies. The CBI has called for increased support for occupational health and expanded childcare provision, which the Chancellor has backed. Nevertheless, more needs to be done to address the ongoing skills gap in the industry.
Online sales continue to fall at a firm pace, with a -26% growth in the year to March, although retailers expect a modest expansion of 5% in online sales next month. Stock volumes are considered to be elevated relative to expected sales, and while they are expected to ease slightly next month, they will still be considered “too high” at 6%.
In contrast, wholesale volumes grew at a firm pace in the year to March, with an 18% growth from -28% in February. Wholesalers expect sales to remain broadly unchanged next month at 2%.
Overall, the CBI’s survey shows that the retail sector is starting to stabilize, which is good news for both retailers and consumers. However, there are still challenges to overcome, and the industry will need to continue to adapt and innovate to remain competitive in the face of changing consumer habits and a difficult economic climate.
