According to the latest CBI Distributive Trades Survey, retailers in the UK are determined to invest in their businesses for growth this year, despite encountering weak retail sales in February. However, the fashion sector continues to face difficulties.
While overall sales volumes remained steady, there were noticeable variations in performance across different sub-sectors. Grocers and non-specialised stores saw an increase in sales volumes, while other sectors, particularly clothing, experienced a decline. Additionally, the CBI revealed that the growth in internet sales has slowed down to below-average levels, and further deceleration is expected in March.
In February, sales volumes were relatively unchanged compared to the same time last year, making it the fourth consecutive month of stagnation. Overall, sales were considered poor for this time of year, and orders placed with suppliers continued to decrease for the tenth month in a row, although at a slightly slower rate than in January.
Despite these challenges, retailers seem to have a relatively positive outlook, as highlighted by the CBI report. Despite setbacks in sales and orders during February, there has been a noticeable improvement in investment plans compared to the previous quarter. In fact, the survey recorded the largest increase in investment intentions in its history. This surge in investment plans is primarily driven by large firms and specific sectors such as grocery, clothing, and non-store retailing.
The CBI Distributive Trades Survey offers valuable insights into the current state of the UK retail sector. It serves as an important indicator of sentiment and sheds light on the challenges faced by various sub-sectors, including fashion. The resilience and optimism exhibited by retailers in the face of a challenging market demonstrate their willingness to adapt and invest in growth. As the fashion sector continues to navigate these hurdles, it will be vital for retailers to identify strategies that align with changing consumer preferences and embrace digital innovation to drive sales and maintain a competitive edge.