The UK retail sector remained in negative territory in October, marking the thirteenth consecutive month of declining sales, according to the latest distributive trades survey. Retail sales volumes fell sharply with a weighted balance of minus 27 percent, only slightly better than September's minus 29 percent, while forecasts suggest a deeper contraction in November (minus 39 percent). Sales were judged poor for the time of year, and retailers expect conditions to remain below seasonal norms.

Online sales offered a brief respite, growing by 4 percent in October, but are projected to contract again in November (minus 8 percent). Wholesalers and motor traders also reported continued weakness, with wholesale sales dropping by minus 31 percent and total distribution volumes falling at a firm minus 30 percent. Persistent uncertainty ahead of the Autumn Budget, coupled with subdued consumer confidence, continues to suppress demand and investment.

Retailers are responding by cutting orders to suppliers at a faster pace (minus 42 percent expected in November) and maintaining moderate stock levels. The findings reflect a sector weighed down by weak demand, cautious spending, and policy uncertainty, prompting calls for fiscal reassurance and greater flexibility in employment policy to restore confidence and support recovery.

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.