GB: CBI Distributive Trades

Thu Oct 29 06:00:00 CDT 2015

Consensus Actual Previous
Level 35 19 49

According to the CBI, UK retailers had a disappointing October. The balance of respondents reporting a rise in volume sales from a year ago was just 19 percent, down some 30 percentage points from September and well short of market expectations and the CBI's own forecast. It was also the weakest reading since April. For November the CBI is forecasting a limited rebound to 24 percent.

Actual retail sales saw an unusually sharp 1.6 percent monthly bounce in October 2014 so the slump in the CBI's annual growth measure need not necessarily equate with a fall in purchases this year. In fact, given the surprising buoyancy of the September findings there was always going to be some downside bias to today's results anyway. Last month's ONS sales data were boosted in no small way by the Rugby World Cup and England's early exit may well have helped to dampen demand this month.

In fact the October survey was not all bad with the orders sub-index (31 percent) unchanged from September and signs that internet buying is starting to pick-up ahead of the Christmas holiday period. That said, today's report still suggests that the official retail sales figures for this month (due 19th November) will not look pretty.

This survey was first introduced in 1983 and is an indicator of short-term trends in the UK retail and wholesale distribution sector. The quarterly and monthly surveys both cover volume of sales, orders on suppliers, sales for the time of year and stocks, while the quarterly survey also covers imports, selling prices, numbers employed, investment and business situation. Both monthly and quarterly surveys now contain questions on current and expected internet sales and average prices for internet goods.

This survey is a leading indicator of consumer spending because retailer and wholesaler sales are directly influenced by consumer buying levels. The monthly update provides a vital update on volume of sales, orders and stocks. Like the industrial survey, it carries significant weight in the formulation of economic policy at the Bank of England and within government as a highly respected barometer of high street trade. It is considered to be an advance indicator of retail sales although it is not well correlated with the official data on a monthly basis.

Monthly and quarterly