Retail sales strengthen in September

Sales and orders grew on the high street at a much stronger rate than had been anticipated in the year to September, with the robust pace of growth expected to continue next month, according to the CBI's latest monthly Distributive Trades Survey.

The survey of 119 firms showed that sales volumes were well-above the average for the time of year, to the greatest extent since April 2007.

Orders placed on suppliers grew at the quickest pace since December 2010 and are expected to strengthen further next month.

Growth was broad-based across retail sectors, with the largest drivers being grocers and clothing. Elsewhere, internet sales volumes slowed slightly in the year to September, but are set to pick up somewhat in October.

Growth in sales volumes for wholesalers eased in the year to September.

Rain Newton-Smith, CBI Director of Economics, said: "As the summer has been drawing to a close, consumers have been out on the high street boosting sales and orders for UK retailers.

"Low inflation and the recovery in wage growth are helping to stimulate consumer demand, but the slowdown in the global economy and tight margins mean retailers won’t get ahead of themselves as we head into autumn.

"Clothing and the food and drink sectors have led the way, and with the general outlook for the UK economy remaining positive, the expectation is that there will be further encouraging results next month."

Some 60 per cent of retailers said that sales volumes were up in September compared with the previous year, while 11 per cent said they were down, giving a balance of +49 per cent, and above expectations (+35 per cent). Some 55 per cent of firms expect sales volumes to increase in the year to September, with four per cent expecting a decrease, giving a balance of +51 per cent.

Some 39 per cent of retailers placed more orders on suppliers than they did a year ago, and nine per cent placed fewer, giving a balance of +30 per cent (highest since December 2010 - +52 per cent). Orders are expected to strengthen further next month (+44 per cent).

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