According to the latest survey conducted by the Confederation of British Industry (CBI), retail sales in the UK experienced a decline in September, primarily driven by the clothing sector. This marks the fifth consecutive month of falling sales volumes, although the rate of decline has significantly slowed compared to the previous month.

The CBI Distributive Trades Survey, which included 47 participants in this particular survey, provides insights from a limited number of retailers. While the report does not offer specific figures on sales growth, it serves as an early indicator of the state of the retail industry.

In terms of sales volumes, the survey revealed a significant improvement from August. The weighted balance for the year to September was -14%, compared to -44% in August. Furthermore, retailers expect the decline in sales volumes to further moderate next month, with a projected weighted balance of -8%.

However, the report highlighted a concerning drop in clothing spending, with a weighted balance of -66%. This means that more retailers witnessed a decline in sales volumes compared to those who saw an increase or maintained stable sales. Nevertheless, the number of retailers reporting a decline was lower than in August.

Sales volumes were slightly above average for this time of year, with a weighted balance of +5% (compared to -9% in August). Retailers anticipate sales to align with seasonal norms next month, with a projected balance of +2%.

Internet sales volumes remained relatively stable in the year to September, experiencing only a marginal decline of -3%. However, retailers anticipate a significant drop in online sales next month, with a projected balance of -36%.

Martin Sartorius, CBI Principal Economist, found some elements of optimism in the survey findings. Retailers expect the decline in sales to continue easing, and last week’s lower-than-expected inflation figures could alleviate pressure on household budgets, providing hope for the crucial autumn and winter trading period. However, Sartorius also highlighted the potential impact of higher oil and fuel prices on sticky inflation. He emphasized the opportunity for policymakers to support business growth through an investment-focused tax regime or by assisting firms in finding or re-skilling the necessary workforce through a reformed Apprenticeship Levy.

Overall, the CBI survey indicates a slow but positive progression in retail sales volumes, with the clothing sector being the most significantly affected. While challenges remain, there are signs of cautious optimism in the industry, especially with the approaching autumn and winter trading period.

Useful links:
Retail Gazette: UK Retail Sales Fall for Fifth Month in a Row – CBI
The Guardian: UK retail sales fall at quickest rate since financial crisis