WIREDGOV

Retailers saw their sales volumes fall at a firm pace in the year to November, according to the CBI’s latest quarterly Distributive Trades Survey. Firms anticipate little festive cheer in December, with a similar rate of decline expected next month.

Retailers remain pessimistic about their business prospects for the next three months, which is reflected in declining employment numbers and deteriorating investment intentions.

The key survey findings included:

• Retail sales declined in the year to November (-19% from +18% in October) with a broadly similar fall expected next month (-21%).
• Sales volumes were seen as average for the time of year (+3% from +20% in October) and are expected to remain broadly in line with seasonal norms in December (-1%).
• Online retail sales contracted in the year to November (-5% from -23% in October). Internet sales have now been flat or falling for 13 months, and an accelerated contraction (-26%) is expected next month.
• Retailers remained notably pessimistic about the business situation over the next three months (-22%), to a similar extent to August (-22%).
• Employment growth in retail slumped in the year to November (-17% from +13% in August) – the first decline in headcount since August 2021. A further fall (-12%) is anticipated next month.
• Retailers expect to reduce investment in the next 12 months compared to the previous 12 (-38% from -31% in August), to the greatest extent since May 2020.

Martin Sartorius, Principal Economist at the CBI, said:

“It’s not surprising that retailers are feeling the chill as the UK continues to be buffeted by economic headwinds. Sales volumes fell at a firm pace in the year to November, and retailers remain notably downbeat about their future business prospects. This pessimism is reflected in investment intentions worsening to the greatest extent since May 2020.

“Retailers and wholesalers contribute £352bn to the UK economy and support a fifth of the nation’s jobs – yet these survey results underline what a tough time it is for the sector. The Chancellor’s decision to back CBI calls for a freeze in businesses rates next April will provide some welcome relief, but retailers are also looking for longer-term measures from Government that can restore momentum to the UK economy. Businesses stand ready to work with Government to implement a serious plan for growth that can lift us all out of the current crisis.”

In addition, data showed:

• Selling prices rose extremely quickly in the year to November, at a pace just shy of the 37-year high recorded in the previous quarterly survey (+82% from +87% in August). Prices are expected to increase at a broadly similar pace next month (+81%).
• Elsewhere, wholesale sales volumes fell considerably in the year to November (-18% from +3% in October), with a broadly similar pace of decline expected next month (-21%).
• Motor traders’ sales continued to fall very rapidly (-54% from -67%). An accelerated decline is expected next month (-60%).

This survey included 156 companies, including 65 retailers.