Retailers reported the strongest pace of growth since September 2015 over the year to October, with sales expected to expand at similar pace next month, according to the latest CBI monthly Distributive Trades Survey.
The survey of 126 firms, of which 60 were retailers, showed that sales for the time of year were considered to be above average and are expected to be in line with seasonal norms in November.
The volume of orders placed upon suppliers was broadly flat in October, having declined steadily during the previous six months, but orders are expected to fall further year-on-year in November.
The rise in overall sales volumes was driven by retailers of clothing, furniture & carpets, and hardware & DIY, while sales by grocers and department stores were flat.
In contrast to a stronger retail sector performance, motor traders reported that sales were flat in October, which was the weakest performance since December 2013. However motor traders expect growth to rebound next month.
Growth in internet sales volumes picked up slightly over the year to October, but remains below the survey long-run average. Internet sales growth is set to increase at a broadly similar pace over the year to November.
Rain Newton-Smith, CBI chief economist, said: “With our Indian Summer now a distant memory, shoppers have been pounding the high street, with sales of clothing and other retailers outpacing expectations.
“With employment still rising and the unemployment rate at an 11-year low, household spending still has some momentum in the short-term, but we do expect the fall in the value of the pound to push up prices through the course of next year, hitting people’s purchasing power.”
- 40% of retailers said that sales volumes were up in October on a year ago, while 19% said they were down, giving a balance of +21%. This was above expectations (+7%), and an improvement on the previous month’s balance (-8%).
- 38% of respondents expect sales volumes to increase next month, with 18% expecting a decrease, giving a rounded balance of +21%.
- 26% of retailers placed more orders with suppliers than they did a year ago, while 29% placed fewer orders, giving a balance of -3%.
- 17% of businesses reported that their volume of sales for the time of year were good, while 10% said they were poor, giving a rounded balance of +6%.
- Growth in internet sales volumes picked up slightly over the year to October (+37%), compared with the previous month (+32%).
- Sales volumes growth was particularly robust in clothing (+71%), furniture & carpets (+83%), and hardware & DIY (+45%).
- 57% of wholesalers reported sales volumes to be up on last year, and 15% said they were down, giving a balance of +42% – the highest balance since July 2015.
- 36% of motor traders reported sales volumes were up on a year ago, while 35% said they were down, giving a balance of +1% – the lowest since December 2013. Sales volumes are expected to grow next month (+24%).