CBI: Retail Sales Dip In Lead Up To Autumn Budget

Retail sales volumes fell at a modest pace in October, after slight growth last month, according to the latest CBI Distributive Trades Survey. Some firms noted consumers were holding back on their spending due to uncertainty surrounding the Autumn Budget.

Looking ahead, firms expect annual retail sales to be broadly flat next month.

Key findings included:

• Retail sales volumes fell at a modest pace in the year to October, following marginal growth in September (weighted balance of -6% from +4% in September). Retailers expect sales to be broadly flat next month (-1%).
  
  
• Retailers reported disappointing sales for the time of year, to a greater extent than the previous month (-25% from -11% in September). Seasonal sales are expected to remain similarly weak in November (-27%).
  
  
• Internet sales volumes in the year to October grew at a firm pace for the second month in a row (+21% from +18% in September). Retailers expect online sales to grow at a faster pace next month (+27%).
  
  
• Orders placed upon suppliers declined marginally in the year to October (-5% from -14% in September). Retailers expect to reduce orders at a faster pace next month (-24%).
  
  
• The total distribution sector (includes retail, wholesale, and motor trades) reported a moderate decline in annual sales volumes this month (-12% from -8% in September), with a similar decline expected in November (-13%).

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 rates reliefs come to an end. This measure should support the sector while a more comprehensive reform of the business rates 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.”

In addition, data from the survey showed:

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

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

Source : CBI

Image : AlbertPego / iStockphoto / 529839265

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