UK retailers report marginal sales growth as online sales surge

However, internet sales volumes surged significantly, rising at the fastest rate since June 2023 (+18 per cent from -15 per cent in August), and are expected to grow even faster in October (+35 per cent).

Nevertheless, retailers reported weaker-than-expected sales for this time of year (-11 per cent from -21 per cent in August) and expect sales to remain similarly below seasonal norms next month (-10 per cent). Orders placed by retailers to suppliers also saw a moderate decline (-14 per cent from -42 per cent in August), with further reductions anticipated in October, albeit at a slower pace (-10 per cent), as per the survey.

The wider distribution sector, which includes retail, wholesale, and motor trades, recorded a mild contraction in year-on-year sales volumes in September (-8 per cent from -20 per cent in August). A similar decline is expected for October (-7 per cent).

Additional data from the survey indicated that stock levels were reported to be "too high" relative to expected demand (+19 per cent from +14 per cent in August), with elevated stock positions expected to persist in October (+20 per cent).

Meanwhile, wholesale sales volumes declined modestly (-8 per cent from -7 per cent in August), with little change anticipated next month (-6 per cent).

Martin Sartorius, principal economist at the CBI, noted: “After a challenging summer, retailers will welcome the modest growth in annual sales volumes this month. While some firms within the retail sector are beginning to see tailwinds from rising household incomes, others report that consumer spending habits are still being affected by the increase in prices over the last few years.

“In contrast to the recovery seen in the retail sector, wholesalers and motor traders continue to see a decline in sales volumes, with businesses reporting concerns about a slow and uncertain market. Retailers, alongside a host of other important sectors, are keen to see the government take long overdue action to address an antiquated business rates system that has become too complex, too unpredictable and is, ultimately, unfair on many firms.”

Fibre2Fashion News Desk (KD)