Retail sales volumes in the year to September fell for the fifth consecutive month, although at a slower pace than the previous month, according to the latest Distributive Trades Survey carried out by the CBI. Retailers also said they expect the contraction in sales volumes to ease further in October.
Similarly, the survey found that orders placed on suppliers contracted at a slower pace than in August, having also fallen for five consecutive months. Orders are expected to be broadly flat in the year to October.
Those surveyed stated that sales volumes were poor for the time of year and to a greater degree than last month. Sales are expected to be broadly average for the time of year next month.
Growth in internet sales eased slightly in the year to September and has remained below the long run average for the past seven months. Expectations are for improved growth in October, although again this will fall short of the long run average.
Aside from furniture and carpet sellers, which reported unchanged volumes in September, sales contracted across all sectors, with lower sales by clothing retailers and department stores driving the fall in volumes.
Rain Newton-Smith, CBI Chief Economist, commented: “Five successive months of falling volumes tells its own story about the tough conditions retailers are having to operate in. Add to this the pressures of Sterling depreciation and the need to plan for potential tariffs and supply issues in the event of a no-deal Brexit and you get a gloomy picture for the sector.
“Retailers are also grappling with ongoing challenges such as digital disruption and the cumulative burden of government policies. Reforming an outdated business rates system and a more flexible apprenticeship levy which delivers better value for money could really help to alleviate the pressure on retailers during these difficult times.”
