RETAIL SALES GROW STRONGLY IN YEAR TO OCTOBER – CBI SURVEY
In the CBI’s latest monthly Distributive Trades Survey, covering the first two and a half weeks of October, 47% of retailers reported that sales volumes were up on a year ago and 17% stated that sales had fallen. The resulting balance of +30% well exceeded expectations (+15%), and was the fastest rate of sales growth since June (+42%). Looking ahead, retailers expect growth in sales volumes to be similarly robust in the year to November (+27%).
In line with rising sales, the volume of orders placed on suppliers increased moderately (+4%), compared to expectations of being flat (-2%).
Despite the second consecutive month of sales growth, high-street retailers still considered the volume of sales to be below average for the time of year (-7%). However, sales were below seasonal norms to the least extent since April (0%), and the survey balance was a little better than expected (-11%).
There was solid growth in a number of individual retail sectors. Clothing and furniture & carpets reported the greatest year-on-year increases in sales (+57% and +58% respectively), with the clothing sector posting the first sales growth since July (+56%). Grocers also reported a rise in year-on-year sales volumes for the sixth month running (+33%), and the footwear & leather sector remained strong, with sales increasing (+39%) for the seventh consecutive month.
Anna Leach, CBI Head of Economic Analysis, said:
“It is great news that last month’s sales growth has continued into October, at a much faster pace than expected, and that this momentum is expected to continue next month too.
Falling inflation has somewhat eased pressures on family budgets, so that households are a little more willing to spend. But there’s still a risk that on-going uncertainty over the global economic outlook could dent consumer confidence, hitting prospects for the retail sector, while the scope for inflation to fall further is limited.”
Elsewhere, wholesalers saw a slight fall in sales volumes on a year ago (-6%), despite expectations of modest growth (+6%), and sales are expected to continue falling in November (-6%).
Meanwhile, the motor trades sector saw the first year-on-year rise in sales volumes (+4%) since March, surpassing expectations of a decline (-20%), although sales are expected to fall once again next month (-19%).
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