Retail sales slipped in September but growth is expected to return next month according to analysis by the CBI.
The monthly Distributive Trades Survey by the CBI shows that the volume of retail sales fell, despite expectations just a month ago that they would be largely unchanged. However, it says sales volumes look set to grow slightly in the year to October and sales volumes for the time of year are above seasonal norms.
The survey also reveals that online sales volume growth has slowed. However, wholesalers had a more positive year with 52% reporting that sales volumes were up on last year, and just 13% said they were down, giving a balance of +39% - the highest balance since July 2015.
The key findings of the CBI retail survey are:
- 30% of retailers said sales volumes were up in September on a year ago, while 38% said they were down, giving a balance of -8%. This was a decline on the previous month's balance (+9%);
- 27% of respondents expect sales volumes to increase next month, with 20% expecting a decrease, giving a balance of +7%;
- 21% of retailers placed more orders with suppliers than they did a year ago, while 29% placed fewer orders, giving a balance of -8%;
- 19% of businesses reported that their volume of sales for the time of year were good, while 12% said they were poor, giving a balance of +7%;
- Sales volumes grew in clothing (+41%) and hardware and DIY (+55%). Sales volumes fell markedly for grocers (-29%), specialist food and drink (-34%), footwear and leather (-38%).
Rain Newton-Smith, CBI chief economist, said: "September is normally an important month for retailers and it's encouraging to see that sales of clothing, DIY goods and hardware are above seasonal norms. However, consumer confidence has been dented since earlier in 2016 and higher inflation is likely to squeeze household incomes over the year ahead. With margins remaining tight, retailers are set to continue to operate in a fiercely competitive environment for some time."