MNI DATA: UK Retail Sales Cool In October: CBI Survey

--October Retail Sales Volumes Balance +5 Vs +23 In September

By Jai Lakhani

     LONDON (MNI) - UK retailers reported a snap-back in retail sales volume

growth in October, after a three-month high in supplier orders in September, a

CBI survey published Wednesday showed.

     The reported sales volume balance fell to +5 in October, down 18 points

from September and well below the MNI median of +20. The number was also below

the three-month moving average of +19.0.

     One consolation is that October's outcome means the headline balance has

now put together a string of six consecutive monthly increases after falling

into negative territory in both March and April.

     Other than rises in footwear & leather, and a strong rise in non-store

growth, sales were either not reported or almost flat across retail sub-sectors.

Worth noting as well was that hardware & DIY fell to an index value of -30 after

a prior month of +17, and other normal goods fell 71 points to -31. This could

suggest promotions stronger than the seasonal-adjustment factor seen in the ONS

retail sales data for September struggled to carry on in the hardware & DIY

sector in October.  

     The expected volume of orders placed upon suppliers was fairly high for the

month of November at +23. This could be a result of expectations being low last

November at +11, but the outcome surprised to the upside by 33 points. Should

expectations be correct, retail sales could bounce back after a non-starter in

October. 

     "Retail sales have begun to cool, as the boost from the summer heatwave and

World Cup celebrations fades away. It's clear the challenges facing the retail

sector are significant. The double whammy of sluggish recovery in household

incomes and digital disruption is making trading conditions tough, and promoting

a deeper structural shift in business models," said Alpesh Paleja, CBI Principal

Economist. 

--MNI London Bureau; +44 203 865 3828; email: jai.lakhani@marketnews.com

--MNI London Bureau; +44208-865-3829; email: Jason.Webb@marketnews.com

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