CBI: Retail distribution stock levels hit a record low

Stock levels relative to expected sales across the distribution sector hit a survey record low for the sixth consecutive month, according to data from the CBI. Stocks were seen as too low in all three major sub-sectors, although for retailers this was to a lesser extent than last month.

Retail sales grew at the weakest pace since March 2021 in the year to September, according to the latest CBI monthly Distributive Trades Survey, while growth in orders placed with suppliers also slowed. Sales and orders are expected to rise at a faster rate in October.

Ben Jones, CBI principal economist, said: “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. 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. Respondents to our survey have told us that they do not expect the transport and production issues that are causing these 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.”

The survey of 126 companies, including 45 retailers, found that respondents viewed sales as poor for the time of year for the first time since March 2021. Sales are expected to be broadly average for the time of year in October.

Internet sales growth slowed in the year to September and has now been below the long-run average for five consecutive months. A similar pace of growth is expected in the year to October.

Wholesalers experienced an uptick in growth in the year to September and expected a similar rate next month.

Motor traders saw growth in sales volumes ease but expected it to pick up next month.

Image courtesy Siemens

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