The latest CBI distributive trades survey reveals a subdued retail market as consumer caution impacts sales volumes. October saw a modest decline in retail sales (minus 6 percent), contrasting with the slight growth in September. This fall is largely attributed to consumer hesitation amid uncertainty surrounding the upcoming Autumn Budget. Retailers anticipate that sales will remain flat next month, reflecting a muted outlook.

Seasonal sales disappointed too, with October's levels far below expectations (minus 25 percent), a trend likely to persist into November. While in-store sales fell, online sales continued to strengthen, with a steady rise of 21 percent, and projections suggest further growth next month.

Additionally, retailers are cutting back on supplier orders, reflecting decreased consumer demand, which is expected to dip further in November. The broader distribution sector, including wholesale and motor trades, similarly recorded a moderate decline in annual sales volumes, likely to continue as we approach the year's end. These trends indicate a challenging landscape for retailers, with only online channels appearing resilient. The data leave the UK RPI at minus 20, showing overall economic activity running behind market expectations. However, with the RPI-P at 2, the shortfall is only due to surprisingly soft prices.

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.