Clothing boosts retail sales growth

UK retail sales have grown at a “slightly faster rate than expected” in December, according to the latest figures from the Confederation of British Industry’s monthly Distributive Trades Survey.

The survey reveals that retail sales growth has accelerated in the year to December, with volumes rising at the fastest pace since September 2015. It notes that growth in retail sales volumes was broad-based, however, sales of clothing continued to perform “strongly” with an increase of 82 percent in sales volume.

Internet sales volumes also continued to rise at a robust pace in the year to December, with a 66 percent increase, its highest since November 2014. Meanwhile, wholesaling reported the strongest volumes growth for almost a year-and-a-half in the year to December.

The survey of 112 firms consisting of 53 retailers showed that sales volumes for the time of year were considered well above average, but noted that retailers expect that growth 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.

Ben Jones, Confederation of British Industry principal economist, said: “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.

“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.”