UK retail sales volumes in year to September fell at a slower pace than previous month, down 14% compared to 44% in year to August, expected to decline 8% in October; real wage growth, improving consumer confidence should provide support to retailers: CBI

LONDON , October 2, 2023 (press release) –

Retail sales volumes fell in the year to September for a fifth consecutive month, but at a much slower rate than last month, according to the latest monthly CBI Distributive Trades Survey. Retailers are expecting the recent downturn in sales volumes to moderate even further next month.

The key survey findings included:

• Retail sales volumes fell in the year to September, but at a much slower pace than last month (weighted balance of -14% from -44% in the year to August). Retailers expect the recent downturn in sales volumes to moderate further next month (-8%).
• Retail stock positions softened in September but remain slightly elevated relative to expected sales (+6% from +15% in August). Retailers expect stock positions to be broadly adequate next month (+3%).
• Orders placed upon suppliers continued to fall in the year to September, though at a slower pace than last month (-19% from -37% in August). Retailers expect to continue cutting back on orders next month (-15%).

Martin Sartorius, CBI Principal Economist, said:

“The retail sector endured a fifth consecutive annual sales decline in September, but there are some signs that this contractionary momentum may be running out of steam. Real wage growth and improving consumer confidence should provide retailers with some much-needed support going into the crucial autumn and winter trading period.

“Nonetheless, retailers’ growth prospects will continue to be constrained by persistent cost pressures and lacklustre UK economic momentum. There is an opportunity in the forthcoming Autumn Statement to create a business environment for growth – whether it’s through an investment-focused tax regime or helping firms find and/or reskill the staff they need with a reformed Apprenticeship Levy.”

In addition, data from the survey showed:

• Sales volumes were seen as marginally above average for the time of year (+5% from -9% in August). Retailers expect sales to be in line with seasonal norms next month (+2%).
• Internet sales volumes were broadly unchanged in the year to September (-3%), but are expected to fall steeply next month (-36%).
• Elsewhere in the distribution sector, wholesale volumes in the year to September fell at a similar pace to last month (-23% from -23% in August), but are expected to stabilise next month (0%). In contrast, motor trades saw volumes growth pick up in the year to September (+15% from +9% in August), with broadly similar growth expected next month (+12%).

Notes for editors

The survey included 172 respondents, 80 of which were retailers. The survey was conducted between 25 August and 13 September. The full summary and table of findings are attached.

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