GB: CBI Distributive Trades

Wed May 23 05:00:00 CDT 2018

Consensus Actual Previous
Level 2 11 -2

The CBI's May Distributive Trades Survey painted a rather more upbeat picture of high street activity than in April. At 11 percent, the balance of firms reporting an increase in volume sales versus a year ago was up 13 percentage points and at a 4-month high. However, while stronger than market expectations, the headline print was still well short of the CBI's 25 percent call made last month.

In fact, sales were still a little below average for the time of year. Across the sector, volumes were up in grocers, hardware and DIY and non-store goods but down in specialist food and drink, clothing, footwear and leather, furniture and carpets, recreational goods and other normal goods. Note that the survey was completed on 11th May so any benefit from the royal wedding last weekend may have to wait until next month's report.

Orders placed with suppliers strengthened (5 percent after minus 5 percent) and retailers expect sales to pick up in June (18 percent after 11 percent). However, the overall business situation (minus 8 percent) is seen deteriorating over the coming quarter.

In sum, the results suggest some improvement this month but more generally the outlook for retail remains sluggish and businesses are cautious.

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