GB: CBI Distributive Trades

Mon Dec 21 05:00:00 CST 2015

Consensus Actual Previous
Level 21 19 7

According to the latest CBI Distributive Trades Survey the high street saw a sizeable pick-up in demand this month. At 19 percent, the balance of retailers reporting higher volumes than a year ago was up 12 percentage points versus its November reading and back at its October level. Even so, it was still slightly short of market expectations and well below the CBI's own forecast made last time.

Indeed, if the survey results are to be believed, strong sales in December will be at the expense of January when the CBI sees its headline index declining 10 percentage points to 9 percent. This would be its second weakest outturn since February. Similarly, expected orders are put at zero percent after an 8 percent outturn this month.

In any event, the CBI noted that early Christmas discounting seemed to be supporting spending implying that higher volumes are at the expense of tighter margins. The bottom line is that there is still no inflation in the retail sector so pressure from this quarter on the BoE MPC to tighten remains minimal.

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