GB: CBI Distributive Trades

Thu Jan 25 05:00:00 CST 2018

Consensus Actual Previous
Level 12 12 20

The CBI was quite cautious about developments in the retail sector at the start of 2018. The balance of respondents reporting an improvement in volume sales versus a year ago remained positive but, at 12 percent, still fell 8 percentage points from December. This matched market expectations but also represented a 3-month low. The forecast balance for February was just marginally higher at 13 percent.

Within the sector, robust sales growth at grocers and non-store retailers offset a decline in furniture and carpets and specialist food and drink. Sales for the time of year fell to minus 17 percent from minus 3 percent while orders were off 16 percentage points at minus 5 percent. Going forward, the CBI warned about the implications for consumer spending of sluggish wage growth and above target inflation.

The monthly correlation between the CBI's survey and actual sales is not particularly strong but today's results point to a possible slowdown in household demand this quarter.

The Confederation of British Industry (CBI) produces a monthly survey (and a more detailed quarterly report) analysing the performance of the UK retail, wholesale and motor trade sector. Volume sales, orders on suppliers, sales for the time of year and stocks are all covered and the quarterly survey also covers imports, selling prices, numbers employed, investment and business situation. Financial markets tend to concentrate on the CBI's annual sales growth measure as a leading indicator of the official retail sales report.

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