Retail sales rebound in October

 

Retail sales probably grew at their fastest pace in almost two years in October, albeit still at a modest pace, and the outlook is expected to improve further next month, industry data showed on Tuesday.

The Confederation of British Industry's distributive trades survey reported sales balance rose to +8 in October from +3 in September, better than economists' forecasts of a rise to +5.

This is the fastest pace of growth since December 2007, and the CBI said consumer demand had been boosted by a rising number of house purchases - which supports demand for domestic appliances and furnishings - and the looming end of a 2.5 percentage point reduction in value-added tax.

For November, retailers expect a balance of +19, their most optimistic outlook since July 2007, around the start of the credit crunch, and plan to place their highest volume of orders with suppliers since November 2007.

"The latest official data shows the economy is still in recession, however the retail sector seems to be finding its feet again after a challenging year and the outlook for November is encouraging" said Andy Clarke, chief operating officer of Asda and chairman of the survey panel.

"It is heartening to see signs of life in sectors related to the housing market, particularly those retailers selling white goods and furniture, who have had a torrid two years."

She said the rise in October's retail sales balance left it consistent with strong annual growth in the official sales measure of over 4 percent - roughly twice the rate reported for September.

John Lewis, the employee-owned group seen as a barometer of retailing, posted a fifth consecutive week of rising department store sales in the week to Oct 17, benefiting from weak comparative numbers and a store opening.