By Daniel Hunter
Retailers reported a strong rise in sales volumes in the year to October and expect that growth will continue at a similar pace next month, the CBI said today (Tuesday).
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.
“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," Anna Leach, CBI Head of Economic Analysis, said.
"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%).
Join us on