By Daniel Hunter

High street sales were flat in the year to October, disappointing retailers’ expectations for another solid rise, but robust growth is expected to return next month, the CBI said today (Monday).

The CBI’s latest monthly Distributive Trades Survey of 125 firms shows sales stalling after three consecutive months of growth, with grocers among the worst affected. Orders growth, however, held up in October and orders are expected to rise modestly again next month.

Elsewhere, wholesalers saw sales growth continuing in line with expectations, although at a slower pace, while sales rose markedly in the motor trade sector.

Barry Williams, Asda Chief Merchandising Officer for Food, and Chair of the CBI Distributive Trades Survey Panel, said: “Although the high street recovery stalled this month, there is optimism that it was just a blip on the previous run of three months' growth.

"Retailers expect sales to pick up next month and are upping orders with their suppliers.

“It's also encouraging to see that signs are pointing towards increased consumer confidence - backed up by continuing growth in certain areas such as furniture and carpets; recreational goods; footwear and leather - all did particularly well in October.”

Key findings:

Retailers

- 42% of respondents reported that sales volumes were up on a year ago, while 39% said they were down, giving a rounded balance of +2%, well below expectations of +31%
- However, retailers expect sales volumes to return to growth next month (+23%)
- Most sub-sectors saw a deterioration in sales growth. In particular, grocers saw the first year-on-year fall in sales volumes (-17%) in eight months. However, some sectors — such as footwear & leather (+37%) and chemists (+67%) — performed more strongly
- Overall, 24% of retailers said that sales volumes were above-average for the time of year, while 25% said they were below-average, giving a rounded balance of -2% - indicating that sales were broadly in line with seasonal norms
- 29% placed more orders with suppliers than they did a year ago and 17% placed fewer, with a resulting balance of +12% - the fourth consecutive month of modest growth.

Wholesalers

- 46% of wholesalers said sales volumes were up while 18% said they were down, giving a rounded balance of +27%. This was in line with expectations (+28%), but considerably slower than the strong sales growth seen in September (+40%)
- Most sub-sectors saw growth, with industrial materials (+100%), other goods (+61%) and building materials (+53%) in the lead. Only agricultural and industrial machinery (-63%) and clothing, textiles and footwear (-10%) saw a decline in sales — the latter for the first time in five months
- Overall, sales are expected to rise again in the year to November, but at a slower pace once again (+11%).

Motor traders

- 94% of motor traders said sales volumes were up while 0% said they were down, giving a balance of +94%, marking the seventh consecutive month of year-on-year sales growth.

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