Retail sales volumes slowed in the year to October following a strong showing in September, according to the CBI’s latest monthly Distributive Trades Survey.
The survey of 112 firms saw the volume of retail sales rise at a slower pace than anticipated in the year to October. But sales were nonetheless regarded as well-above average for the time of year and growth is expected to improve slightly next month. Growth in orders placed upon suppliers was also lower than expected but remained above its long run average.
Internet sales volumes accelerated in the year to October, with growth set to pick up further next month.
Almost all retail sectors recorded growth in the year to October, although grocers and clothing saw a slight slowdown. Motor trades saw growth in sales volumes pick-up, while for wholesalers they were broadly flat in the 12 months to October.
Rain Newton-Smith, CBI Director of Economics said:
“Growth in sales and orders for high street retailers remains resilient, but there has been a slight slowdown in the pace of that growth following a strong September.
“Internet sales are starting to ramp up again as we head towards Christmas and we would expect them to continue this positive pattern until the end of the year.
“Low inflation and improving wages mean the prospects for sales growth are decent, but challenges remain, like the weakening global economy and competitive pressures in the retail sector, so we can’t take this positive outlook for granted.”
- 38% of retail sector respondents said volumes were up on a year ago, and 20% said they were down, giving a balance of +19%. This represents a slowdown growth on the previous month (+49%) and was below expectations (+51%)
- Retailers expect sales volumes to grow at a somewhat stronger pace next month (+24%), with 40% expecting them to rise and 16% to fall
- Most sub-sectors saw growth in sales volumes, if a little slower than the previous month – grocers (+20%), clothing (+36%), non-store (+25%) and other normal goods (+40%)
- The volume of orders placed upon suppliers grew (+19%), but was well below expectations (+44%). Firms anticipate a further slowdown in growth next month (+8%)
- Stocks relative to expected demand (+11%) were slightly ahead of expectations (+5%)
- Volumes of sales for the time of year were well above average (+24%) and are expected to remain above average to a similar degree next month
- The volume of internet sales has picked-up (+38%) in line with expectations (+37%), with growth expected to pick up further next month (+45%).
32% of wholesalers reported sales volumes to be up on last year and 35% said they were down, giving a balance of -3%.
93% of motor traders reported sales volumes to be up on last year and 7% said they were down, leaving a balance of +85%.