Retailers struggled greatly during the recession, and unlike businesses in other industries have not seen a huge pick-up in sales since recovery began to take hold. However, a survey by the Confederation of British Industry (CBI) has indicated that the slow growth in sales has resulted in a huge boost to the confidence of retailers, with optimism climbing to its highest level in more than three years during April.
According to the report, 42 per cent of retailers surveyed reported a rise in sales during April, compared with only 12 per cent who believe the end of the month will see a lower volume of sales than during the same period last year. This positive balance of 30 per cent is a significant leap from the 13 per cent positive result recorded in March, and beats analysts’ predictions of a 17 per cent reading.
Chairman of the CBI Distributive Trades Panel, Barry Williams, believes that this rise in optimism will be echoed by growth in sales should economic recovery begin to affect consumers in real terms.
He says; “The high street has a spring in its step – retailers performed well in April and enjoyed a strong rise in sales compared with this time last year.
“The trick now is for this to become a consistent theme, and deliver much needed support to household spending and economic growth in the months ahead.”
In a further boost to retailers, it appears that this sudden spike in confidence is not simply a fluke. Almost 50 per cent of the 131 retailers participating in the survey expect sales to rise once more next month, with the positive balance of 43 per cent the highest recorded level since December 2010.
April’s result has largely been put down to a rise in consumer footfall and completed sales thanks to Mother’s Day and the late falling of Easter, and marks the fifth consecutive month of growth in the retail industry. Although March was slightly more disappointing in terms of sales growth than had been previously hoped, official data from Moody’s Analyics shows a comfortable expansion in first quarter retail sales – something which economist Melanie Bowler expects to continue throughout 2014.
Ms Bowler says; “Households are more confident thanks to the strong economic recovery and notable improvements in the labour market.
“Improving household finances, thanks to rising wages, cooling price growth and loose credit conditions will help boost spending.”
However, Ms Bowler also points out that this rise in spending will not necessarily hugely benefit the high street, as sales made over the internet are continuing to rise as recovery progresses.
She continues; “Shop vacancy rates remain elevated, and the strong shift toward internet sales and away from high street spending continues.
“On average, more than 10 per cent of retail sales were conducted online in 2013.”
While retailers may be feeling more confident, Ms Bowler’s comments prove that more must be done to revive the high street as a means of combatting the rise of internet shopping. By implementing techniques such as online ordering and click and collect, retailers will be able to enjoy their share of the recovery whilst becoming ever more confident about the future.
