Retail sales in the UK have been strong this month, with clothing stores taking advantage of the cooler weather and supermarkets boosting sales with discounts.According to the CBI retailers’ survey, this is the third month of higher than average sales growth reported and has beaten expectations for October. It is the fastest sales growth experienced in the last three years over the quarter from August to October.
Retailers are excited about November and are forecasting another increase in sales. Figures were not the same throughout the market as certain sectors, such as DIY and hardware, seeing a decline during October. This is indicative of the cooling housing market and the announcement by Homebase recently about closing stores due to a lack of consumer interest in home improvement projects.
The CBI also reported a decline in sales at specialist food and drink businesses, as well as at pharmacies.
The main findings remain upbeat and are in sharp contrast to the earlier report from the British Retail Consortium that online and high street stores had seen their weakest performance since the recession of 2008/09.
The CBI stated that its sales volume measurement for October was 31%, and has remained the same as the balance in September, with 48% of retailers stating increased sales volumes on prior year figures, while 17% stated that they had experienced a decline. A balance of 25% had been expected by economists polled by Reuters.
The director of economics at CBI, Rain Newton-Smith, said the recent decline in the inflation rate may boost spending, but UK recovery is at risk due to the stalling of the eurozone, Ukraine tensions and Middle East conflicts, which could affect consumer confidence and spending.
Households are still struggling with the decline in real-time wages. The cooling down of the housing market and potential interest rate hike next year has also affected consumer confidence.
Retailers are living in the hope that they will continue the increased sales volume over the upcoming season.