Record high stock levels as Brexit deadline extended again

Record high stock levels as Brexit deadline extended again

Retailers’ stock levels in relation to expected sales were at their highest on record in October according to the latest monthly CBI Distributive Trends Survey, against the backdrop of a continuing decline in sales.

The latest spike in stock adequacy (the highest since the survey began in 1983) followed another large peak seen in August. A combination of the proximity to Christmas and ongoing Brexit uncertainty is likely to have driven stocks higher, particularly with retailers  stocking seasonal products earlier than usual. Notably, the survey did not show a similar spike in retailing stocks ahead of the previous Brexit deadline in March.

The broader backdrop of activity remained weak. Retail sales volumes and orders both fell in the year to October for the sixth consecutive month, albeit at the slowest pace seen over this period so far. Retailers expect sales to stabilise in November, but anticipate a sharper fall in orders. Sales were seen as remaining poor for the time of year, with similar expectations for November.

There was more positive news on internet sales, which saw growth pick up, albeit remaining in line with the long-run average. Internet sales are expected to grow at broadly the same pace next month.

 Rain Newton-Smith, CBI Chief Economist, said:

“Retailers have now endured six months of falling sales, the longest period of decline since the financial crisis. The sector is struggling with ongoing digital disruption, layered on top of cost pressures from a weak pound and the cumulative burden of an outdated business rates regime.

“Retailers have also had to contend with the looming Brexit deadline, which has partly driven a record spike in stocks. The timing could not be worse: the run-up to Christmas is a crucial time of year for the retail sector, and not knowing where we will be on November 1st is adding more strain to an already beleaguered sector.”

Elsewhere, wholesalers continued their recent patchy performance as sales fell again, following a rebound in growth last month. Wholesalers viewed sales for the time of year as poor, after an above average reading last month.

Across the economy more broadly, growth has been volatile in the first half of 2019, driven by shifting activity in response to ongoing Brexit uncertainty. We expect the economy to grow modestly in the event of a “smooth” transition to a new Brexit deal, though a no-deal Brexit would likely hit output and financial markets significantly.

Key findings


  • Retail sales volumes in the year to October fell for the sixth consecutive month (-10%) but at the slowest pace over this period so far. Retailers expect sales volumes to be broadly flat next month (+1%).
  • Orders placed on suppliers also fell in the year to October (-4%) at a slightly slower pace than September (-9%). Expectations are for a deterioration in orders next month (-22%).
  • Sales for the time of year were poor (-12%), to a similar degree to last month (-11%). Sales are expected to remain poor next month (-10%).
  • Year-on-year internet sales growth improved in October (+49%, from +33% in September). Similar growth is expected pace in November (+51%).


  • Wholesaling sales (-10%) declined in the year to October, following growth in the previous month (+21%).
  • Growth in orders eased (to +7% , from +21% in September).

Motor trades

  • Motor traders’ sales volumes (-100%) decreased in the year to October (from +13% in September), with a further decline expected (-78%)

For further information visit the CBI website. 

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