Retailers hoping stagnant sales figures just a blip

Shoppers reined in their spending this month to leave retail sales broadly flat and bring a three-month growth spurt to an end.
Tom Vosa.Tom Vosa.
Tom Vosa.

Falling sales at supermarkets weighed heavily on the sector, although rising demand for furniture, carpets and footwear pointed to some recovery in consumer spending, the CBI’s distributive trades survey showed.

Stagnating retail sales surprised economists, who had only expected growth to moderate slightly, but some said a warmer-than-normal month may have meant shoppers delayed spending on winter clothing.

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While 42 per cent of retailers said sales volumes were up on a year earlier, 39 per cent said they were down, to give a rounded balance of just two per cent

That was well below expectations for a 31 per cent reading, and compared with September’s 15-month high of 34 per cent.

Barry Williams, chair of the survey and chief merchandising officer for food at supermarket Asda, said retailers are optimistic it is just a “blip”.

The survey of 125 firms between September 25 and October 16 showed a balance of 23 per cent expect volumes to grow next month.

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Mr Williams added: “It’s encouraging to see that signs are pointing towards increased consumer confidence – backed up by continuing growth in certain areas such as furniture and carpets, recreational goods, footwear and leather.”

Britain’s recovering housing market, lifted by Government stimulus schemes, ensured another good month for furniture and carpet retailers, where a net 80 per cent reported higher sales volumes.

Recreational goods retailers reported a positive balance of 67 per cent, while footwear stores were up a net 37 per cent.

But grocers’ sales volumes fell for the first time in eight months, with a net 17 per cent drop, and most sectors saw a deterioration in growth.

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A net 10 per cent of clothing retailers saw volumes grow, ending three months of robust increases by fashion stores.

Yorkshire Bank economist Tom Vosa said: “We had flagged up the upside risks to the consensus forecast for a 32 out turn this morning and our own for a 31 print, but we had not expected to see such a large decline. However, we suspect that an unseasonally warm month had some adverse impact, with consumers delaying winter clothing purchases.”