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Highlights:
- Sales Recovery: UK retail sales showed a modest increase in September, with a balance of +4, ending a three-month decline.
- Online Demand Growth: Strong online sales growth contributed significantly, reaching a balance of +18, the highest since June 2023.
- Optimistic Outlook: Retailers anticipate continued sales growth into October, with some beginning to feel the benefits of rising household incomes.
Retail sales in the UK experienced a slight uptick in September, according to the latest Distributive Trades Survey released by the Confederation of British Industry (CBI) on Friday. The survey highlighted a marginal increase in retail sales volumes, attributed largely to robust online demand, marking an end to a three-month decline.
The survey reported a weighted balance of +4 for retail sales volumes, the highest reading since May, compared to a balance of -27 in August. Despite the positive shift, sales figures were still perceived as disappointing for the time of year, reflected in a balance of -11, although this indicates a noticeable improvement from August's ten-point decline.
Looking ahead, retailers surveyed indicated optimism regarding continued sales growth, with a projected balance of +5 for October. Online shopping emerged as a key driver of this growth, achieving its fastest rate of increase since June 2023. The CBI noted a balance of +18 for online sales, a significant rise from the -15 reported in August.
The summer months posed significant challenges for many retailers, particularly clothing brands, which struggled due to unseasonable weather and ongoing inflationary pressures that affected consumer spending.
Martin Sartorius, the principal economist at the CBI, remarked, “After a challenging summer, retailers will welcome modest growth in annual sales volumes this month. While some firms are beginning to see tailwinds from rising household incomes, others report that consumer spending habits are still being affected by the increase in prices over the last few years.”
The survey was conducted with a sample of 155 businesses, including 53 retailers and 82 wholesalers, between August 29 and September 16. The CBI's balance is calculated as the weighted difference between the percentage of firms reporting an increase and those reporting a decrease in sales.
Overall, the report suggests a cautious yet positive outlook for the retail sector, with improvements in sales driven primarily by the online shopping trend.
