A TREND of falling retail sales in the UK has continued in October after a sharp decrease was recorded.
The latest Confederation of British Industry (CBI) survey follows on from Office for National Statistics (ONS) statistics which showed retail sales volumes falling back 0.8% month-on-month in September.
Retailers will be hoping that this is due to consumers taking a breather before splashing out for Christmas, after strong overall gains in July and August.
Overall, retail sales volumes still rose by 1.2% quarter-on-quarter in the third quarter.
Figures gained a significant boost in the third quarter from the heatwave and the football World Cup in July.
October’s weak CBI survey fuels suspicion that consumers may be a bit more restrained in their spending in the short-term at least – as their purchasing power is still relatively limited while confidence is fragile.
Several factors, including low saving ratios and an interest rates hike in August, may also limit consumer spending. Meanwhile, lenders have cut back on the availability of unsecured consumer credit.
Howard Archer, chief economic advisor to the EY Item Club, commented: “Retailers are modestly more upbeat about the near-term outlook for retail sales with a balance of +17% expecting sales volumes to be up year-on-year in November. However, this is the second lowest expectations balance (after August) since February.
“It is also notable that retailers were cautious in placing orders with suppliers, with this balance standing at -10% in October.”
On a more positive note for consumers, regular annual earnings growth climbed to 3.1% in the three months to August, the best since early 2009.
Inflation also fell back to 2.4% in September after spiking to a six-month high of 2.7% in August.
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