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Retail sales fall back at sharpest pace since June - CBI
Retail sales fell in the year to October, suggesting a loss of momentum from September, when sales rose at the fastest pace for 18 months, according to the CBI’s latest monthly Distributive Trades Survey.
The survey of 116 firms, of which 54 were retailers, found that conditions across the retail sector were mixed. Grocery volumes were flat, following five months of strong growth. Across non-food retail categories, department stores, clothing and ‘other normal goods’ were among those reporting falling sales, while retailers of furniture, DIY and recreational goods reported strong growth. Internet sales growth also picked back up to the long run average.
With sales volumes expected to decline again in the year to November, and stock levels deemed broadly adequate, orders placed upon suppliers fell for the 18th consecutive month - and at the fastest pace since June. Orders are expected to fall at even faster pace next month.
Ben Jones, CBI Principal Economist said:
“The fall in retail sales in October is a warning sign of a further loss of momentum in the economy as coronavirus cases pick up and restrictions are tightened across many parts of the country.
“It’s no surprise that sales have dipped despite no new direct restrictions on retail in England, as the evidence from earlier in the year suggests consumers become more cautious as case numbers rise.
“With footfall still down by one third, many retailers face a difficult run-up to the all-important Christmas period. It is vital that local authorities use their discretion over the new Tier 2 grant funding to target support in a way that helps keep town and city centres open for business.”
Figures are balance statistics unless otherwise stated.
- Retail sales fell sharply in the year to October (balance of -23%, from +11%) and are expected to fall at a similar pace next month (-26%).
- A supplementary question found that retail sales volumes were down by 22% relative to ‘normal conditions’, compared to a shortfall of 14% in September.
- Orders placed on suppliers also fell sharply (balance of -39%, from -14%) and are expected to fall at an even faster rate next month (-48%).
- Sales were seen as poor for the time of year (balance of -5%, from +4%) and are expected to be broadly average in August (-1%).
- Internet sales growth picked up and was broadly in line with the long run average (balance of +47, from +35), with a similar pace of growth expected next month (+47).
- Stock levels in relation to expected sales were seen as broadly adequate, after easing to their lowest level since March (+6%, from +11%). Stock levels are expected to remain similar next month (+8%).
- Wholesalers reported a slower fall in sales volumes (balance of -20%, from -41%) and expect a similar pace of decline next month (-18%).
- After three months of rising sales, motor traders reported falling volumes in the year to October (-32%, from +24%). Sales volumes are expected to fall again next month (-16%).
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