Retail sales grow at fastest pace since September 2015 - CBI

Retail sales grew at the fastest pace since September 2015 in the year to April, according to the Confederation of British Industry's latest monthly Distributive Trades Survey.

The retail sales balance rose to +38 from +9 in March, beating analysts' expectations for a drop to +6.

Looking ahead, however, volume growth is expected to slow in the year to May and sales are set to be broadly average for the time of the year, with orders largely unchanged.

Within the retail sector, the clothing and grocers sectors performed particularly strongly, while retailers of furniture & carpets and specialist food & drink stores reported a second consecutive month of falling sales.

Ben Jones, CBI principal economist, said: "Retail sales held up better than expected, especially considering that the survey did not cover the Easter period. The warm weather in early April might go some way to explaining the uptick, with sales by clothing shops and grocers driving overall growth.

“However, retailers are still cautious over the outlook, expecting slower growth over the year to May, as higher inflation eats into household spending. With price competition remaining fierce and rising costs squeezing margins, retailers face mounting pressures in the months ahead.”

Howard Archer, chief UK and European economist at IHS Global Insight, said: "It is undeniable that the April CBI distributive trades survey was markedly stronger than expected.

"This is obviously welcome given the marked overall weakness of retail sales through the first quarter, and it does raise questions over just how much consumers will limit their spending as their purchasing power is squeezed.

"However, it should be noted that the CBI indicated that there was likely an appreciable boost to retail sales from the warmer weather early on in April. Notably sales of clothing (best since September 2010) and grocers were robust (we had a couple of barbecues!)."