High-street sales lifted by sunshine, sport and summer sales, says CBI

Nearly 50% of UK firms enjoying sales volumes up on year ago, with Aldi and Lidl biggest supermarket winners, finds CBI survey

High-street sales soared due to the sunny weather, British sporting successes and the royal baby, and firms took on more workers at the fastest pace in more than a decade, the Confederation of British Industry claims.

The organisation’s monthly distributive trade survey found that nearly half of all businesses said that sales volumes were up on a year ago, with just 22% saying they fell, giving a balance of +27%, the strongest in nine months.

More than one in four retailers added that they expected sales to grow at the same rate next month, suggesting a slow recovery on the high street.

Barry Williams, chairman of the CBI distributive trades survey panel, said: “The feel-good factor from the heatwave, summer sales, royal baby fever and sporting victories, has helped boost the high street. A rise in spending is welcome news, but the bottom line is that confidence will not bounce back fully until family finances improve further.”

Growth came from all areas, including clothing, food and recreational goods, while employment in the retail sector is expected to increase, according to the CBI.

In its quarterly survey, the reported employment balance improved to its highest level since May 2002, while the business situation index rose to its highest in three years.

The supposed green shoots come as the UK’s third biggest supermarket, Sainsbury’s, defied the march of the discount retailers Aldi and Lidl as the only one of the big four supermarkets not to lose market share in the last 12 weeks.

Tesco, Asda and Morrisons all lost out, although the UK’s fourth biggest supermarket, Morrisons, did manage to stem the tide of recent falls in sales, according to Kantar Worldpanel.

John Coll, director at the retail specialists, said: “Sainsbury’s has continued to grow ahead of the market over the past 12 weeks, achieving sales growth of 4.9%. It benefitted from its support of the paralympics last year and its growth has continued since then.”

Sainsbury’s market share grew to 16.5% from 16.4% last year, while Tesco fell to 30.2% from 30.7%, Asda fell to 17.1% from 17.5%, and Morrisons fell to 11.3% from 11.5%.

However all supermarkets did see an increase in takings, partly due to inflation, but also thanks to the prolonged warm summer.

Ice cream sales soared 21%, sun care products rose 37%, and hay fever remedies also grew 37% over the summer, compared with the same period last year.

The biggest winners, though, continued to be the discounters, as Aldi and Lidl both recorded their biggest market share since entering the UK market in 1989 and 1994 respectively.

Aldi increased its market share from 3% to 3.7% since last year, with takings in the 12 weeks to August 18 soaring 31.9% to nearly £1bn, compared with £660m in the same period in 2012.

Lidl also saw a boost to its market share from 2.8% to 3.1%, with its revenues also up 14.9% to £760m in the 12-week period.

These supermarkets still remain a long way behind the UK’s leading store, Tesco, which took £7.4bn over the same period, or £88m a day.

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