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UK retail sales show signs of slowing decline in Sept 2023: Survey

26 Sep '23
3 min read
Pic: Shutterstock
Pic: Shutterstock

Insights

  • UK retail sales showed signs of slowing decline, improving to a weighted balance of minus 14 per cent in September from minus 44 per cent in August, according to a survey by Confederation of British Industry.
  • Retailers expect further moderation, alongside stabilising stock levels and supplier orders.
  • Internet sales are set for a sharp drop next month.
UK’s sales volumes for the year to September 2023 showed a weighted balance of minus 14 per cent, a marked improvement from the minus 44 per cent reported in the year to August, according to the latest monthly Confederation of British Industry (CBI) Distributive Trades Survey.

Retailers are optimistic that this downturn in sales will continue to ease in the coming month, with an expected drop of just minus 8 per cent. Additionally, retail stock positions softened in September but remain slightly elevated in relation to expected sales, recording a balance of 6 per cent as compared to 15 per cent in August. Retailers are optimistic that stock levels will be broadly adequate next month, with a projected balance of 3 per cent.

Orders placed on suppliers also continue to decline, though at a slower pace than last month, standing at minus 19 per cent compared to minus 37 per cent in August. This trend is expected to continue with a projected decline of minus 15 per cent for next month. Sales volumes for the month of September were seen as marginally above the seasonal average, with a positive balance of 5 per cent, a recovery from minus 9 per cent in August. Retailers expect these numbers to be in line with seasonal norms in the upcoming month, with a projection of 2 per cent, as per the survey.

Internet sales volumes remained largely unchanged this year until September, showing a slight negative balance of minus 3 per cent. However, a significant decline is anticipated for the next month, with projections showing a steep fall to minus 36 per cent. Meanwhile, in the broader distribution sector, wholesale volumes for the year to September remained consistent with last month, at a negative balance of minus 23 per cent. These are expected to stabilise next month at a balance of 0 per cent.

Martin Sartorius, CBI principal economist, said: “The retail sector endured a fifth consecutive annual sales decline in September, but there are some signs that this contractionary momentum may be running out of steam. Real wage growth and improving consumer confidence should provide retailers with some much-needed support going into the crucial autumn and winter trading period.

“Nonetheless, retailers’ growth prospects will continue to be constrained by persistent cost pressures and lacklustre UK economic momentum. There is an opportunity in the forthcoming autumn statement to create a business environment for growth, whether it’s through an investment-focused tax regime or helping firms find and/or reskill the staff they need with a reformed Apprenticeship Levy.”

ALCHEMPro News Desk (DP)

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