Finally some good news for UK retailers, which have not had a joyous year so far.
Retailers have reported the strongest pace of growth since September 2015 this month, as UK shoppers have decided to splash out on autumnal clothing.
In a survey of 126 retailers, 40 per cent said sales volumes in October were higher than a year ago against 19 per cent that said they were down. This gave a balance of +21 per cent in the CBI’s latest retail sales report. The previous month’s reading had been -8 per cent. In August, although the reading was positive, it was just 9 per cent while in July the reading at come in at a painful -14 per cent.
“With our Indian Summer now a distant memory, shoppers have been pounding the high street, with sales of clothing and other retailers outpacing expectations,” said Rain Newton-Smith, CBI chief economist, adding:
With employment still rising and the unemployment rate at an 11-year low, household spending still has some momentum in the short-term, but we do expect the fall in the value of the pound to push up prices through the course of next year, hitting people’s purchasing power.
Several well known high street names, including Next, have reported challenging trading this year as shoppers have taken a cautious approach and are increasingly spending more of their disposable incomes on recreational activities and holidays.
In the CBI survey, 38 per cent of retailers surveyed said they expect an increase in sales volumes next month as well, compared with 18 per cent that are prepared for a decrease. This also produced a positive balance of +21 per cent.
The dominant services industry – which includes everything from shops and hotels to banks and accountants – kept the UK economy going in the third quarter. Third quarter growth came in at a better 0.5 per cent for July to September but construction, manufacturing and agricultural output all declined during the period. Services account for nearly 80 per cent of the UK economy.