UK retailers cut orders at record pace

UK retailers cut the volume of orders placed with suppliers at the fastest rate since records began in 1983 during September, as falling sales and weak consumer sentiment increased pressure across the distribution sector.

The latest survey from the Confederation of British Industry found retail sales volumes fell at a steeper pace in the year to September, with the weighted balance dropping to -55% from -48% in August.

Retailers reported a particularly sharp reduction in the orders they placed with suppliers. The balance fell to -62%, compared with -29% a month earlier, marking the weakest result in the CBI’s Distributive Trades Survey since the series began more than four decades ago.

Conditions deteriorated online as well as in physical retail. Online sales volumes fell to a balance of -68%, from -43% in August, representing the fastest annual decline since October 2023. Businesses expect online sales to contract at the same rate in October.

Martin Sartorius, lead economist at the CBI, said: “Retailers reported a steep fall in annual sales volumes in September, with some firms attributing the deterioration to poor consumer sentiment.”

The results extend a difficult period for the sector. In August, the CBI recorded a retail sales balance of -48%, while businesses had expected conditions to improve somewhat during September. Instead, the subsequent fall to -55% indicates that the slowdown deepened.

Expectations for October remain negative, although retailers anticipate the annual fall in sales volumes will moderate to a balance of -37%. Orders placed with suppliers are expected to remain under pronounced pressure at -63%, suggesting businesses are continuing to limit commitments to new stock while demand remains uncertain.

Stock levels relative to expected sales remained below their long-run average. The balance stood at +10% in September, compared with a historical average of +17%, and retailers expect little change next month.

Weakness was not confined to retail. Wholesale sales volumes fell at a faster pace, with the balance deteriorating to -24% from -13%, while motor trade sales recorded a balance of -31%, compared with -26% in August. Across retail, wholesale, and motor trades, the broader distribution sales balance fell to -36% from -27%.

Lower orders have consequences beyond individual retailers. Reduced purchasing feeds directly into wholesalers, manufacturers, logistics providers, and importers, particularly where suppliers depend on relatively short replenishment cycles. Sustained caution can move pressure further back through supply chains before any recovery or further deterioration becomes visible in headline sales figures.

Retailers are also managing softer demand against elevated employment, property, energy, and financing costs. Where fixed expenses remain high, decisions around stock, staffing, store investment, and promotions become harder for businesses with limited cash headroom.

September’s online figures are notable because digital channels are not offsetting weaker store-based trading. The -68% balance points towards softer discretionary demand across channels rather than a straightforward transfer of spending from physical shops to online platforms.

The order figures also show businesses prioritising inventory discipline rather than assuming demand will recover quickly. Lower forward orders can protect working capital and reduce excess stock, although retailers risk being less able to respond quickly if consumer demand unexpectedly strengthens.

The survey arrives as companies prepare for the Autumn Budget and continue to assess labour costs, business rates, and other operating expenses. The CBI has called for measures including lower employer National Insurance costs and business rates reform.

Official retail data and private-sector surveys measure different aspects of the market and can diverge from month to month. The CBI figures are based on businesses reporting whether sales and other measures are higher, lower, or unchanged from a year earlier rather than providing a direct measure of total pounds spent.

Across sales, online trading, supplier orders, wholesale activity, and motor trades, September nevertheless produced a consistently weak set of balances. Retailers expect some moderation in the pace of the sales decline during October, but their purchasing plans show caution remains firmly embedded further along the supply chain.