Grocery and clothing sectors fuel fast pace of retail sales

Retail sales grew at the fastest pace for two years in the year to September, according to the latest CBI Distributive Trades Survey.

Retailers expect continued growth in both sales and orders in the year to October, albeit at a slower pace.

Growth in internet sales volumes rose in the year to September, to slightly above the long-run average and are expected to expand at a slower pace in October.

Within the retail sector, the main drivers of growth in overall volumes were the grocery and clothing sectors.

CBI head of economic intelligence Anna Leach said: “It’s encouraging to see some vigour returning to the retail sector in September, with sales growth picking up from August and consumer demand expected to hold up reasonably well next month.

“But inflation continues to squeeze household budgets and with the pressure on incomes set to persist, retailers will continue to face a challenging environment.

“The Government has the opportunity to provide a fillip for retailers in the forthcoming budget – particularly those maintaining a physical presence on the High Street – by bringing forward the switch in the indexation of business rates from RPI to CPI.”

The survey found that sales for the time of year were slightly above seasonal norms. Retailers of furniture and carpets, specialist food and drink stores and sellers of recreational goods reported falling sales volumes.

Motor traders reported rising demand in the year to September, with sales growing at the fastest pace in six months.

Orders placed with suppliers rose in the year to September, rebounding from a fall in the previous month.