Retailers report above average sales growth in October

LONDON, UNITED KINGDOM - JANUARY 02:  Shoppers walk around the flagship branch of the department store John Lewis in Oxford Street on January 2, 2014 in London, England. Department stores House of Fraser and John Lewis have announced they experienced good trading over Christmas while shares in Debenhams have fallen following the company's poor sales during the same period.  (Photo by Oli Scarff/Getty Images)

Retailers reported the strongest pace of growth since September 2015 over the year to October, with sales expected to expand at similar pace next month, according to the latest CBI monthly Distributive Trades Survey.

In a survey of 60 retailers firms, 40% said sales volumes were up in October on a year ago, while 19% said they were down, giving a balance of 21%.

This was way ahead of expectations of a 7% balance and an improvement on the previous month’s balance (-8%).

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More than a third (38%) of retailers expect sales volumes to increase in November, with 18% expecting a decrease, giving a rounded balance of 21%.

The rise in overall sales volumes was driven by fashion, furniture & carpets, and hardware & DIY, while sales by grocers and department stores were flat.

Growth in internet sales volumes picked up slightly over the year to October (+37%), compared with the previous month (+32%).

Rain Newton-Smith, CBI Chief Economist, said: “With our Indian Summer now a distant memory, shoppers have been pounding the high street, with sales of clothing and other retailers outpacing expectations.

“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.”

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