Falling oil prices and low inflation have driven up retail sales, with grocers recording “robust growth” in January, the latest CBI distributive trades study has found.
In it survey of 127 firms, CBI found grocers’ sales volumes had grown 50% year on year, whilst total retail sales “exceeded expectations” with half of retailers reporting sales growth. This is despite sales volume growing at a slower pace month on month. The best performing retail category was clothing, where sales volumes grew 91% year on year.
“After the sales bonanza of Black Friday cooled down, retailers saw solid footfall through the doors over the Christmas trading period, leading to further robust growth in sales in the New Year. However, under the spotlight of strong competition, some retailers are feeling the heat on their margins,” said CBI director of economics Rain Newton-Smith.
“Falling oil prices and low inflation mean consumers have a bit more money in their pockets. We expect to see this translate into strong sales growth in the months ahead.”
This forecast comes as a result of 46% of retailers telling CBI that they expect their sales volumes to grow over the next month. Wholesale sector sales also increased at a healthy pace, with 64% of wholesalers reporting growth.