The retail industry has experienced something of a boom this year as the economy has taken a turn for the better causing consumer confidence to soar. This has been especially clear in sectors such as electronics and furniture, with shoppers choosing to purchase big ticket items rather than saving for a rainy day as was the case for the previous four years.
However, it seems that consumers lost their enthusiasm for shopping during October as sales fell rather flat according to the Confederation of British Industry (CBI). The number of its members reporting higher sales than last year’s was only slightly higher than those reporting a sales drop, data from the monthly distributive sales survey shows.
This has caused many economists to feel concerned as they were expecting far more positive results in the run-up to Christmas. However, the CBI expects sales to rebound next month as consumers begin their gift and food shopping, meaning that this month’s poor figures could simply be a blip in the recovery process.
Chairman of the CBI survey panel, Barry Williams, claims that business confidence remains high and certain areas which have performed well this year so far continued to do so in October.
He says; “Although the High Street recovery stalled this month, there is optimism that it was just a blip.
“It’s also encouraging to see that signs are pointing towards increased consumer confidence, backed up by continuing growth in certain areas such as furniture and carpets which all did particularly well in October.”
Grocers and supermarkets were the biggest casualties in a particularly slow sales month, with consumer purchases falling by 17 per cent year on year. Yet this has not prevented the majority from placing higher orders with suppliers in a bid to prepare for the Christmas rush, demonstrating a prevailing optimism despite the disappointing figures.
Capital Economics’ assistant economist, Jack Allen, expects growth to return next month as the nature of the distributive trades survey means quick changes in fortune are entirely possible.
He says; “This is the most volatile of the retail surveys, so we would not read too much into month to month changes.
“And despite the monthly fall, the reported sales balance still points to annual growth in the official measure of retail sales volumes of about 1 per cent.”
Do you think retail sales will pick up into November as consumers start Christmas shopping, or will the trend for flat sales continue after the previous 3 consecutive months of sales growth?
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