Clothing reported a strong year-to-date for sales volumes

Clothing reported a strong year-to-date for sales volumes

Retail sales growth accelerated in the year to December, with volumes rising at the fastest pace since September 2015, boosted by strong clothing revenues, figures show.

The latest Distributive Trades Survey from the Confederation of British Industry (CBI) showed that sales for the time of year were considered to be well above average – but are expected to slow somewhat in the year to January.

Meanwhile, orders placed on suppliers rose at the fastest pace in over a year, but are expected to be broadly stable in January.

Clothing reported a strong year-to-date for sales volumes, with a balance of +82% of clothing retailers reporting year-on-year growth in the period. Internet sales volumes also continued to rise at a robust pace in the year to December, with the survey balance of +66 at its highest since November 2014. However, expectations are that they will slow somewhat in the year to January (+53%).

"It's encouraging to see retailers reporting another month of healthy sales growth leading up to the festive season, which rounds off a fairly solid quarter," says Ben Jones, CBI principal economist.

"While we still expect to see decent growth in the near term, the pressures on retail activity are likely to increase during 2017, as the impact of sterling's depreciation feeds through. With higher inflation beginning to weigh on households' purchasing power, consumption patterns are likely to shift, creating winners and losers across the retail landscape."

The survey showed that 51% of retailers said sales volumes were up in the year to December, compared to the previous year, while 16% said they were down, giving a balance of +35%.

In addition, the survey of 112 firms, of which 53 were retailers, showed 17% of respondents expect sales volumes to increase in the year to January, with 19% expecting a decrease, giving a balance of -2%.

And while 32% of retailers placed more orders with suppliers than they did a year ago, 19% placed fewer orders, giving a balance of +12%.