Retail sales growth slows as driver shortage hits stock levels
By Josh White
Date: Friday 24 Sep 2021
(Sharecast News) - Retail sales grew at the weakest pace since March in the 12 months to September, it was reported on Friday morning, while growth in orders placed with suppliers also slowed.
According to the Confederation of British Industry's (CBI's) latest distributive trades survey, however, sales and orders were expected to rise at a faster rate in October.
It said retail sales rose 11% in September, from a previous 60%, while retail orders also grew at a slower pace in the year to September, at 20% versus 68%, with a "slight acceleration" expected next month to 24%.
Sales were seen as poor for the time of year in September, and were expected to be "broadly average" for the time of year in October.
Stock levels in relation to expected sales were seen as too low for the fifth consecutive month as well, although to a lesser extent than in August, and were expected to remain too low next month.
Online sales slowed in the year to September, with a similar rate also expected in October.
Looking at wholesalers, however, the CBI said the sector reported a "slightly faster" rate of growth compared to last month, at 32% from 28%, and was expecting a similar rate of growth in October at 31%.
Motor traders saw growth ease to 19% from 47%, with growth there expected to pick up next month at 49%.
Finally, in distribution, the volume of stocks in relation to expected demand hit a new survey record low for the sixth consecutive month at -23% from -22%, with further deterioration anticipated next month at -24%.
"Demand cooled for retailers in the year to September after running red hot over the summer, pushing sales below seasonal norms for the first time since March," said the CBI's principal economist Ben Jones.
"But volumes are expected to return to more typical levels for the time of year next month.
"Low stock adequacy remains a concern across the distribution sector."
Jones said respondents to the survey said they did not expect the transport and production issues that were causing shortages to ease significantly until at least next year and, in some cases, beyond.
"The government should take steps to relieve some of the pressure on the distribution sector to ensure we don't face shortages of key goods in the coming months.
"This should start with immediately reviewing and updating the Shortage Occupation List, including adding HGV drivers."
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