2014 ANSWERING PRACTICES SURVEY OF CBI DISTRIBUTIVE TRADES

2014 ANSWERING PRACTICES SURVEY OF CBI DISTRIBUTIVE TRADES SURVEY RESPONDENTS OUR ‘SURVEY OF SURVEYS’ PRESENTED BY JONATHAN WOOD – HEAD OF CBI SURVEY MANAGEMENT GROUP AND ANSWERING PRACTICES PROJECT SPONSOR DEVELOPED BY MIA ANDERSSON – SENIOR POLICY ADVISOR, ECONOMIC ANALYSIS EC BCS WORKSHOP – NOVEMBER 13 TH 2014 HTTP: //WWW. CBI. ORG. UK/BUSINESS-ISSUES/ECONOMY/BUSINESS-SURVEYS/

Distributive Trades Survey ● Launched in July 1983 – mixed mode ● Covers the retail, wholesale distribution and motor trades sectors ● 4 questions in monthly survey, covering sales volumes, orders placed upon suppliers, sales for the time of year, stocks and internet sales. ● Additional questions in quarterly surveys (Feb, May, Aug, Nov) on imports, prices, employment, investment and the business situation and internet sales. ● Around 130 respondents each month. ● Data from the survey is supplied to the European Commission (EC). ● The EC also have their own questions embedded in the survey. ● The survey celebrated its 30 th anniversary in 2013

DTS Answering Practices Survey ● Conducted in order to maximise understanding of how respondents answer the DTS ● Fourth Answering Practices Survey undertaken for the DTS. ● Conducted between 14 th May and 16 th June 2014. ● 85 responses – approximately 65% of the usual response rate. ● Developed in consultation with the Bank of England, Monetary Analysis Division 17/09/2020 3

Who usually completes the DTS survey questionnaire? % respondents 50 40 30 20 10 0 Chairman/ MD/ CEO/ dep Chair/ VP 17/09/2020 Director of Planning and Manager/ Stock function (e. g. Strategy director Controller finance, marketing, sales, etc) Owner Partner General manager/ company secretary/ accountant Other 4

At what level are the survey results used in your company? % respondents 50 40 30 20 10 0 Chairman/ MD/ CEO/ dep Chair/ VP 17/09/2020 Director of Planning and Manager/ Stock function (e. g. Strategy director Controller finance, marketing, sales, etc) Owner Partner General manager/ company secretary/ accountant Other 5

Volume of sales 1 ● What do you define as the reference period for comparison of year-on-year sales volumes? % respondents Retail Wholesale 60 50 40 30 20 10 0 17/09/2020 Sales in the four weeks Sales in the survey month Sales for the previous up to the point of only up to point of to date, plus a forecast of calendar month answering the survey answering what they will be for the remainder of the month Other 6

Volume of sales 2 ● Is any adjustment made for sales generated from additional selling space? Retail Wholesale % respondents 100 90 80 70 60 50 40 30 20 10 0 Yes 17/09/2020 No 7

Volume of sales 3 ● Is any adjustment made for seasonal variations? Retail Wholesale % respondents 100 90 80 70 60 50 40 30 20 10 0 Yes 17/09/2020 No 8

Volume of sales 4 ● Do you sell products outside of the UK? Retail Wholesale % respondents 80 70 60 50 40 30 20 10 0 Yes 17/09/2020 No 9

Volumes of sales and orders ● With reference to expected sales volumes and orders placed on suppliers, do these expectations reflect? Retail Wholesale % respondents 50 45 40 35 30 25 20 15 10 5 0 Typical sales/orders Recent months’ trading Combination of both for the time of year typical sales/orders and recent trading 17/09/2020 Quantitative Subjective assessment procedure/ forecast 10

EC Questions ● Interpretation of ‘trend over the past three months’ Retail Wholesale % respondents 70 60 50 40 30 20 10 0 17/09/2020 Beginning to end of the 3 month period Past 3 months compared to previous 3 months Past 3 months compared with same 3 months a year ago Some combination all three 11

EC Questions 2 ● Interpretation of ‘trend over the past three months’ since 2008 2014 2008 % respondents 80 2014 % respondents Retail 90 2008 Wholesale 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 17/09/2020 0 Beginning to end of the 3 month period Past 3 months Some compared to compared with combination all previous 3 same 3 months three months a year ago Other Beginning to end of the 3 month period Past 3 months Some compared to compared with combination all previous 3 same 3 months three months a year ago 12 O

Volume of sales for the time of year ● How do you assess sales volumes as being ‘average for the time of year’? Retail Wholesale % respondents 60 50 40 30 20 10 0 Look at last year’s Look at sales for the Use a trend of sales Use a forecast of Make a subjective sales for the month over a in recent months sales trend over the assessment number of years next few months 17/09/2020 Other 13

Volume of stocks ● How do you assess the ‘adequacy’ of stocks? Retail Wholesale % respondents 60 50 40 30 20 10 0 Current sales 17/09/2020 Expected sales Combination of (i) and (ii) Past levels / historic average Subjective assessment 14

Imports ● How do you assess whether the proportion of deliveries from suppliers accounted for by imports is more/less/the same? Retail Wholesale % respondents 70 60 50 40 30 20 10 0 Quantitative procedure 17/09/2020 Subjective assessment 15

Prices 1 ● How do you compare the change in prices on a year ago? % respondents Retail Wholesale 80 70 60 50 40 30 20 10 0 Average price changes over the 12 month period 17/09/2020 Prices prevailing at time of answer 16

Prices 2 ● How do you assess the change in ‘average selling prices’ of your products? Retail Wholesale % respondents 60 50 40 30 20 10 0 Simple average of Weighted average of Total value of sales individual prices compared with one year earlier 17/09/2020 Subjective assessment Other Blank 17

Employment ● How do you determine your response referring to total numbers employed? Retail % respondents Wholesale 100 90 80 70 60 50 40 30 20 10 0 Assign weights reflecting relative importance of full-time and part-time employees 17/09/2020 Simple sum of the numbers of full-time and part-time employees Subjective assessment Other Blank 18

Prices and employment ● Interpretations of expectations for the month ahead Retail Wholesale % respondents 90 80 70 60 50 40 30 20 10 0 1 month ahead 17/09/2020 2 months ahead 3 months ahead Over 3 months ahead 19

Sales and prices • When answering Q 1 (volume of sales) and Q 6 (average selling prices), what range of movement (up or down) would you regard as falling within the reply ‘the same’? Q 6 Prices Q 1 Sales volumes 2014 70 80 2008 2014 2008 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0. 1 to 1% 17/09/2020 1. 1 -2% 2. 1 -4% >4% Blank 0 0. 1 to 1% 1. 1 -2% 2. 1 -4% >4% Blank 20

Investment intentions ● What proportion of your total capital spending in a year is accounted for by: Retail Average % Wholesale 50 45 40 35 30 25 20 15 10 5 0 Land buildings 17/09/2020 Vehicles and machinery IT Other 21

Business situation 1 ● When asked about business situation prospects, do you respond in terms of: Retail Wholesale % respondents 80 70 60 50 40 30 20 10 0 1 month ahead 17/09/2020 2 months ahead 3 months ahead 6 months ahead 22

Business situation 2 ● Is your assessment of business prospects ahead compared to: Retail Wholesale % respondents 60 50 40 30 20 10 0 The time of answering 17/09/2020 The past month The past 2 months The past 3 months 23

Internet sales question ● Do you sell goods over the internet? Retail Wholesale % respondents 80 70 60 50 40 30 20 10 0 Yes 17/09/2020 No 24

Summary ● Answering Practices Survey highlights issues that should be considered in interpreting results of the Distributive Trades Survey. ● Some variation in responses to most questions. ● Often a split between Retail/Wholesale. ● Some questions may benefit from better clarification – subject to further internal assessment. ● However, broad consistency in responses for some questions. ● Survey participants continue to support and actively respond to these extensive primary research exercises 17/09/2020 25

Thank you ● Thanks to Christian Gayer and Ecfin colleagues for their support and this opportunity to present our answering practices surveys – these ‘Survey of Surveys’ ● Thanks to Rebecca Wong, CBI Survey Operations and Research Executive for leading the project and to Nicola Grimwood and Chris Taylor for their key support ● Thanks to CBI Senior Policy Adviser, Mia Andersson for developing this analytical presentation and to her colleagues Alpesh Paleja and Ben Jones for their invaluable support and input ● Special thanks to Garry Young and colleagues at the Bank of England, Monetary Analysis Division for their valued input and support of these answering practices surveys ● And especial thanks to Alan Joy, our statistical and analytical expert for his key contribution to developing and realizing this survey data ● 30 th Anniversary of the CBI’s DTS Survey Pearl of wisdom link 17/09/2020 26

CONTACT US Jonathan Wood Head of CBI Survey Management Group e: jonathan. woods@cbi. org. uk t: +44 (0)20 73958 105 m: 07966 807 759 e: mia. andersson@cbi. org. uk t: +44 (0)20 73958 72 www. cbi. org. uk