U.K. retail sales unexpectedly drop in September, likely to pick-up in October: CBI

The latest CBI monthly Distributive Trades Survey showed that the volumes of U.K. retail sales dropped in the year to September after rising in the previous month. According to the survey of 120 companies, out of which 63 were retailers, indicated that the sales volume dropped in spite of previous month’s expectations of largely unchanged sales. But sales volumes are expected to grow a tad in the year to October.

The CBI distributive trades survey's retail sales balance fell to -8 in September from +9 in August. In all, volumes of sales for the time of the year were considered to be above seasonal norms, according to CBI monthly Distributive Trades Survey. The orders volume placed upon suppliers dropped for the sixth straight month, as compared with the projections of a recovery in order growth.

Lower sales at specialist food & drink, grocers and footwear & leather mainly drove the decline in overall volumes within the retail sector. On the contrary, clothing, DIY and hardware recorded strong growth. Meanwhile, growth in internet sales volumes decelerated further in the year to September; however, growth is likely to rebound in October.

“Consumer confidence has been dented since earlier in 2016 and higher inflation is likely to squeeze household incomes over the year ahead. With margins remaining tight, retailers are set to continue to operate in a fiercely competitive environment for some time”, stated CBI Chief Economist Rain Newton-Smith.