Retail sales increase but hours worked falls

British retail sales experienced solid growth in the year to July 2014, as nearly half of businesses saw their sales increase, according to a survey by the Confederation of British Industry (CBI).

The CBI's latest trade survey found that 46% of retail firms saw a growth in sales in the year to July 2014, while a quarter (25%) saw sales volumes drop.

Key findings:

  • 51% of retailers expect their sales to grow in August 2014 and 15% expect them to decrease
  • 80% of motor traders reported rising sales in the year to July 2014 while 6% said that they fell
  • 44% of wholesalers said sales rose in July 2014 year-on-year, and 21% reported a fall.

Barry Williams, chair of the CBI distributive trades survey panel, said:

"As the temperature began to rise, it seems so did sales volumes. Almost all sectors saw growth, with grocers and clothing stores telling us they performed particularly well as people bought barbeque supplies and summer outfits.

"Retailers expect an even faster rise in sales volumes next month, and are stocking up in anticipation of growing demand."

The sales figures came as the British Retail Consortium (BRC) released data revealing a drop in the number of hours worked in the retail sector.

The average number of hours worked by full time staff per store fell to its lowest level in Q2 2014. This is the equivalent of a fall of 2.5% in full time jobs.

Helen Dickinson, director general of the BRC, said:

"Retailing, in particular grocery retailing, is an extremely low margin business. In order to continue to deliver high quality goods at affordable prices, retailers are keeping an increasingly close eye on their costs - the largest of which are their property and their people.

"The increasing upward pressure of business rates in recent years has meant that retailers have had less and less control over the cost of their property. This in turn has seen retailers ensuring that their workforce is as productive as possible and deployed across their stores in the most efficient manner."