Retailers report their fastest average growth since September 2015 over the past year, with retail sales expected to expand at similar pace next month, according to the latest CBI monthly distributive trades survey.
The survey of 126 firms, of which 60 were retailers, shows that sales for this year are considered to be above average and are expected to be in line with seasonal norms in November.
Less than one in five (17 per cent) businesses report that their volume of retail sales for the time of year are good, while 10 per cent say they are poor, giving a rounded balance of +6 per cent.
The volume of orders placed upon suppliers is broadly flat in October, having declined steadily during the previous six months, but orders are expected to fall further year-on-year in November.
The rise in overall retail sales volumes is driven by clothing, furniture and carpets, and hardware and DIY retailers, while sales by grocers and department stores are flat.
In contrast to a stronger retail sector performance, 35 per cent of motor traders say they are down to the slowest period since December 2013. However, motor traders expect growth to rebound next month (+24 per cent).
Internet sales volumes picked up slightly over the year to October (37 per cent from last years 32 per cent), but remains below the survey long-run average. Internet sales growth is set to increase at a broadly similar pace over the year to November.
Rain Newton-Smith, CBI chief economist, says, ‘With our Indian Summer now a distant memory, shoppers have been pounding the high street, with sales of clothing and other retailers outpacing expectations.’
Newton-Smith adds, ‘With employment still rising and the unemployment rate at an 11-year low, household spending still has some momentum in the short-term, but we do expect the fall in the value of the pound to push up prices through the course of next year, hitting people’s purchasing power.’