UK retail sales drop in October following growth in September: CBI

Retailers in the region reported disappointing sales for the time of year, to a greater extent than the previous month (-25 per cent from -11 per cent in September). Seasonal sales are expected to remain similarly weak in November (-27 per cent), according to the latest Confederation of British Industry (CBI) Distributive Trades Survey.

Internet sales volumes in the year to October grew at a firm pace for the second month in a row (+21 per cent from +18 per cent in September). Retailers expect online sales to grow at a faster pace next month (+27 per cent).

Orders placed upon suppliers declined marginally in the year to October (-5 per cent from -14 per cent in September). Retailers expect to reduce orders at a faster pace next month (-24 per cent). The total distribution sector (includes retail, wholesale, and motor trades) reported a moderate decline in annual sales volumes this month (-12 per cent from -8 per cent in September), with a similar decline expected in November (-13 per cent).

Martin Sartorius, principal economist, CBI, said: “Retail sales volumes slipped back slightly in October, with some firms highlighting increased consumer caution ahead of this week’s Autumn Budget as a key factor. This weakness in activity was reflected across the broader distribution sector, with wholesale and motor trade firms also reporting declining sales. Looking ahead, retailers aren’t expecting an immediate turnaround, with annual sales set to be flat in November.”

“We are looking for reform of business rates in Wednesday’s Budget. The sector will be looking for a bridging solution beyond April 2025, when temporary business rate reliefs come to an end. This measure should support the sector while a more comprehensive reform of the business rate system is undertaken. Immediate support in the budget could include a freeze to the standard and small-business multipliers until the next re-evaluation in 2026. The chancellor can also give certainty to retailers and their customers by keeping VAT, corporation tax, income tax, and national insurance contributions at their current levels,” added Sartorius.

Wholesale sales volumes declined at a moderate pace in the year to October (-14 per cent from -8 per cent in September) and are expected to fall at a firmer pace next month (-20 per cent). Motor trades sales volumes fell at a slower pace in the year to October (-22 per cent from -43 per cent in September) and are expected to slow further in November (-16 per cent). Retail stock volumes remained elevated in relation to expected demand in October, but to a slightly lesser extent than the long-run average (+13 per cent from +19 per cent in September; long-run average +17 per cent). Stocks are set to remain similarly elevated in November (+10 per cent), revealed the survey.

The survey was in the field between September 26 and October 15, 2024. The survey included 177 respondents, of which 70 were retailers and 91 were wholesalers.

Fibre2Fashion News Desk (SG)