MNI DATA ANALYSIS: UK Sep Sales Growth Lowest Since GFC: CBI

By Jamie Satchithanantham

     LONDON (MNI) - October retail sales growth fell back sharply from last

month's two-year high, hitting the lowest level since the height of the

financial crisis, according to the CBI Distributive Trades survey published

Thursday.

     A net -36 of retailers reported a fall in sales volumes in the October

survey, significantly undershooting expectations made in September. It was the

lowest pace of growth since March 2009 (-44%). 

     October's result contrasts greatly from September's net +42%. The headline

index has proven to be erratic in recent months; prior to September's high, the

index sat at a 14-month low of -10. 

     The expected sales volume balance for November, just a month before the

peak Christmas period, was 3%.

     Just under 60% of Retailers placed fewer orders with suppliers compared to

a year ago offset by just 14% who said they ordered more. This meant the net

balance was -43%, the fastest pace of decline since March 2009 (-47%). 

     The orders picture was expected to deteriorate further in November,

signalling firms dampened anticipation of consumer demand. November's expected

balance fell to -11, the lowest orders expectation since March.  

     The decline in sales volumes was "fairly broad-based" according to the CBI

report, with evidence of lower sales at "department stores,stores, specialist

food retailers and furniture & carpet stores, among others".

     That said, sellers of recreational goods, hardware & DIY and the other

'normal goods' reported that sales had risen over the year.

     "It's clear retailers are beginning to really feel the pinch from higher

inflation. While retail sales can be volatile from month to month, the steep

drop in sales in October echoes other recent data pointing to a marked softening

in consumer demand," Anna Leach, CBI Head of Economic Intelligence, said.

     As highlighted, the CBI monthly data are very volatile and this can be

attributed to the fact that the survey includes close to only 50 retailers (49

in October) who are asked whether, in the first two weeks of the month, sales

were higher or lower than a year ago. 

     In addition, the reported sales balance is not seasonally adjusted. In

September, for example, despite sales orders registering the highest sales

balance since September 2015, only +13 respondents said their orders were above

seasonal norms.  

     The official retail sales data showed sales volumes narrow by 0.8%

month-on-month in September, again painting a different picture to the one

suggested by the CBI data, that after a strong 1.0% m/m rise in August. 

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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