UK's retail sales outlook grim in Nov 2022: CBI

Retail sales declined in the year to November (-19 per cent from +18 per cent in October) with a broadly similar fall expected next month (-21 per cent). Sales volumes were seen as average for the time of year (+3 per cent from +20 per cent in October) and are expected to remain broadly in line with seasonal norms in December (-1 per cent), as per the key findings of CBI’s latest quarterly Distributive Trades Survey.

Online retail sales contracted in the year to November (-5 per cent from -23 per cent in October). Internet sales have now been flat or falling for 13 months, and an accelerated contraction (-26 per cent) is expected next month.

Retailers remained notably pessimistic about the business situation over the next three months (-22 per cent), to a similar extent to August (-22 per cent). Employment growth in retail slumped in the year to November (-17 per cent from +13 per cent in August)—the first decline in headcount since August 2021. A further fall (-12 per cent) is anticipated next month.

Retailers expect to reduce investment in the next 12 months compared to the previous 12 (-38 per cent from -31 per cent in August), to the greatest extent since May 2020.

“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,” said Martin Sartorius, principal economist at the CBI.

“Retailers and wholesalers contribute £352 billion 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 the government that can restore momentum to the UK economy. Businesses stand ready to work with the government to implement a serious plan for growth that can lift us all out of the current crisis,” added Sartorius.

In addition, data showed that 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 per cent from +87 per cent in August). Prices are expected to increase at a broadly similar pace next month (+81 per cent).

Elsewhere, wholesale sales volumes fell considerably in the year to November (-18 per cent from +3 per cent in October), with a broadly similar pace of decline expected next month (-21 per cent). Motor traders’ sales continued to fall very rapidly (-54 per cent from -67 per cent). An accelerated decline is expected next month (-60 per cent). This survey included 156 companies, including 65 retailers.

Fibre2Fashion News Desk (NB)