HIGH STREET SALES GROWTH REMAINS ROBUST – CBI
Retail sales volumes continued to grow in the year to October, with another strong rise expected in the month ahead, according to the CBI.
The CBI’s latest monthly Distributive Trades Survey of 124 firms showed a third successive month of firmly above-average sales growth. But sales growth was mixed across different sub-sectors, and sales fell below average for the time of year.
Grocers and the clothing sector in particular saw an acceleration in sales growth. However a fall in sales was reported in other sectors, including hardware & DIY and specialist food & drink. Chemists’ sales fell for a second consecutive month.
The volume of orders placed on suppliers rose at a faster pace than expected, while stock adequacy picked up strongly.
Elsewhere, wholesaling sales continued to grow robustly in the year to October and volumes are expected to rise strongly again next month. Sales growth for motor traders picked up, after a marked slowdown in the previous month.
Rain Newton-Smith, CBI Director of Economics, said:
“Sales on our high streets are still ticking along and, with similar prospects next month, retail growth is looking more stable.
“The clothing sector in particular appears to be bouncing back after the mild weather in September deterred people from buying their winter warmers.
“The recent fall in inflation may help lift the spirits of households by making their budgets stretch further. But risks remain to the UK recovery more generally, with the Eurozone stalling, conflict in the Middle East and tensions over Ukraine. This could have an impact on consumer confidence and spending going forward.”
48% of retailers said sales volumes increased in the year to September, while 17% said they fell, giving a balance of +31%
Growth was mixed across sectors – Clothing +86%; Grocers +33%; Non-specialised +51%; Furniture & carpets +72%; Chemists -55%; Specialist food & drink -24%; hardware & DIY -33%
34% of firms said that orders were up on a year ago, while 22% said they fell, giving a balance of +12%
The 3-month moving average of sales growth was +33% – the highest since February 2011 (+33%)
The volume of stocks rose sharply further above “adequate” levels, relative to expected demand (+30%, from +18% in September)
46% of retailers said they expect sales volumes to increase in the year to November, while 15% said they anticipate a fall, giving a balance of +31%.
68% of wholesalers said that sales volumes increased in the year to October, while 13% said they fell, giving a rounded balance of +55% – the highest since September 2007 (+67%), but similar to the growth seen in the previous two months
Sales are expected to grow at a similarly robust pace in the year to November (+51%).
33% of motor traders said that sales volumes increased in the year to October, while 10% said they fell, giving a balance of +23%
Growth in sales volumes is expected to decelerate next month (+13%).