Surprise UK retail sales jump in August down to grocery sector - CBI
No joy for fashion retailers in the latest Confederation of British Industry (CBI) numbers for this month. Despite British retailers surprisingly reporting their strongest month for sales in nine months, confounding forecasts, that performance was almost entirely driven by grocers.
The CBI's retail sales balance for August jumped to +37 from -4 in July although retail sales for the time of year were judged to be broadly “average”.
And online retail sales volumes continued to fall on a year ago, albeit “at far more modest pace than in previous months”, the CBI said.
"While retail sales returned to solid growth in the year to August, firms remain pessimistic about their business situation over the next three months – to the greatest extent since the first Covid-19 lockdown in 2020," said Martin Sartorius, principal economist at the CBI.
This gloom is reflected in firms’ expectations to reduce capital expenditures over the next 12 months, relative to the previous 12, “which continue to be resolutely negative”.
The CBI survey also showed average selling price inflation quickened to its fastest pace since 1985 at +87 from +77 in May after consumer price inflation hit a 40-year high of 10.1% in July. Prices are expected to rise at a similarly fast pace in September.
Meanwhile, retail price pressures grew more acute in August, with year-on-year average selling prices growing at their quickest pace since 1985. Price inflation is expected to continue at a similarly fast rate next month.
Retailers judged that stocks were “too high” in relation to expected demand in August, to the greatest extent since May 2020. Stock positions are anticipated to remain firm next month.
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