GB: CBI Distributive Trades

Thu Apr 26 05:00:00 CDT 2018

Consensus Actual Previous
Level -3 -2 -8

The CBI's new Distributive Trades Survey found retailers still struggling in April but expectations are for a rebound in next month.

The balance of respondents reporting an increase in volume sales from a year ago was minus 2 percent, broadly in line with the market consensus but comfortably short of what the CBI was forecasting in March (16 percent). Sales for the time of year (minus 9 percent) and new orders (minus 5 percent) were both disappointing. However, the CBI is predicting a sharp bounce-back to 25 percent in May which, if accurate, would be the strongest outturn since last November.

In fact, with actual sales in April 2017 jumping fully 1.8 percent on the month, the apparent weakness of this month's CBI measure may be misleading as it was always going to be subject to downside risk. Still, the overall tone of today's report is soft and industry expectations are that the current pressure on high street sales is unlikely to end any time soon.

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