The latest CBI Distributive Trades Survey reveals that retail sales volumes in the UK experienced a decline for the fifth month in a row in September. However, the rate of decline was slower compared to the previous month. It should be noted that the survey is based on the views of a limited number of retailers and does not provide specific sales growth figures, but serves as an indicator of the retail landscape.
The report states that the weighted balance of retail sales volumes fell by -14% in the year to September, in comparison to -44% in the year to August. This significant decrease in the rate of decline suggests that the downturn in sales volumes is starting to moderate. Retailers are also optimistic that the downturn will continue to ease next month, with a projected weighted balance of -8%.
One concerning aspect highlighted in the report is the sharp decline in clothing spending, which saw a weighted balance of -66%. This indicates that a larger number of retailers reported a decrease in clothing sales volumes compared to those reporting an increase or no change. However, it is worth noting that the number of retailers reporting a decline in sales volumes was lower than in August.
Despite the overall decline, sales volumes were slightly above average for the time of year, with a weighted balance of +5% (compared to -9% in August). Retailers anticipate sales to be in line with seasonal norms next month, with a projected weighted balance of +2%.
Internet sales volumes remained relatively stable in the year to September, with a weighted balance of -3%. However, retailers are expecting a significant decline in internet sales next month, with a projected weighted balance of -36%.
Martin Sartorius, CBI Principal Economist, expressed some optimism regarding the survey results. He noted that retailers anticipate the fall in sales to continue easing and highlighted the recent lower-than-expected inflation figures, which could potentially alleviate pressure on household budgets and provide hope for the crucial autumn and winter trading period. However, Sartorius also highlighted concerns about the potential impact of higher oil and fuel prices on inflation, suggesting that sticky inflation may persist. He called on policy makers to create a business environment that promotes growth, either through investment-focused tax incentives or by providing support for firms in their search for or re-skilling of staff. The upcoming Autumn Statement provides an opportunity for such measures to be implemented.
Useful links:
1. CBI Distributive Trades Survey
2. CBI Press Release
