British retailers are cutting the orders they place with suppliers faster than at any time in more than four decades. The latest Distributive Trades Survey from the Confederation of British Industry (CBI), published on 24 September, shows the balance for retail orders falling to -62%, down from -29% in August. It is the steepest decline since the survey began in 1983. The news matters far beyond the high street. When shops order less, the effect travels back along the supply chain to wholesalers, importers, manufacturers and shipping firms, many of them outside the UK.
A Sharp Fall in Sales
The order cuts follow a weak month for sales. The CBI's retail sales balance falls to -55% in the year to September, from -48% in August. Retailers also judge sales to be poor for the time of year, and online sales fall at their fastest rate since October 2023.
Martin Sartorius, Lead Economist at the CBI, says some firms link the decline to poor consumer sentiment. In his view, the long sales downturn is now pushing retailers to cut orders at a record pace.
Retailers expect little change soon. They forecast that orders will fall at a similar speed in October, with a balance of -63%. Sales should decline more slowly, but still quickly.
It is worth noting what the survey measures. It shows the balance between firms reporting rises and firms reporting falls, not the size of the change. It is a guide to direction rather than an exact measure of spending.
Mixed Signals From Shoppers
The picture is not all negative. GfK's Consumer Confidence Index, published on 25 September, rises one point to -13. This is the third monthly rise in a row, the first such run since summer 2024. Official figures from the Office for National Statistics also show a 0.5% rise in retail sales volumes in August, after a fall in July.
So why are retailers so cautious? Confidence is improving, but from a low level, and households remain careful with their money. Rising energy bills continue to squeeze budgets. Retailers' own forecasts show they are planning for weak demand, not a recovery.
The CBI survey also shows that retail stock levels remain below their long-run average compared with expected sales. In simple terms, shops are keeping their shelves lean. This reduces the risk of unsold goods. However, it also leaves less room to respond if demand suddenly picks up.
The Effect Moves Up the Supply Chain
The weakness is already spreading. According to the CBI, wholesale sales fall faster in the year to September, with the balance moving from -13% to -24%. Motor trade sales also decline at a strong pace. Across retail, wholesale and motor trades together, total sales fall to -36%, from -27% in August.
For overseas suppliers, the UK is an important market. Many of the clothes, electronics and household goods on British shelves are made abroad. A record cut in UK orders means fewer shipments, smaller production runs and more uncertain planning for the factories that serve British shops. The timing is difficult too. The cuts come as the Christmas season approaches, the most important trading period of the year for many retailers.
At the same time, retailers are changing how they buy. H&M's chief executive, Daniel Ervér, says the Swedish fashion group is buying more clothes with shorter lead times and from factories closer to its main markets. This approach lets a retailer order smaller amounts, later in the season, and react faster to demand. If more firms follow this model, suppliers that are far from their customers may find it harder to win orders.
What Comes Next
The CBI is using the figures to push for policy change. Ahead of the Autumn Budget, it asks the Government to cut employer National Insurance contributions and reform business rates. The group argues that lower costs would help retailers and other distribution firms invest, hire and grow.
For suppliers, the key question is whether better consumer confidence turns into real spending before Christmas. If shoppers return, retailers with lean stock may need to reorder quickly, bringing a late rush of work for factories and shipping firms. If they do not, the record cut in September may mark the start of a longer squeeze on the businesses that supply Britain's shops. The CBI's October survey, and the ONS figures for September, offer the next clear test.
