UK retailers are bracing for a further decline in sales next month despite the festive season approaching, as indicated by a recent, highly regarded survey released on Tuesday. Retailers' confidence in the outlook for the upcoming three months fell significantly in November, marking the most considerable drop in two years.
According to the latest quarterly Distributive Trades Survey conducted by the Confederation of British Industry, a net 18 percent of retailers reported a decline in retail sales volume for November compared to a net 6 percent in October. Looking ahead, a net 29 percent of retailers anticipate a decrease in sales for December.
Approximately 22 percent of retailers described sales volumes for the time of year as "poor," which is an improvement from 25 percent in October. The index reflecting business expectations for the next three months plummeted to -21 percent from -13 percent in August, marking the lowest point since November 2022.
Retailers also plan to cut back on investments over the next year, with the balance rising to -27 percent from -35 percent in the previous period. In terms of pricing, selling price inflation decreased in the year to November, with the balance dropping to +24 percent from +30 percent in August.
"Retailers continue to report disappointing sales, although trading conditions have somewhat improved since mid-year," noted Ben Jones, the CBI's Lead Economist. "However, the last time retailers felt this pessimistic was in November 2022, during the height of the inflation shock," Jones added. "This sharp drop in sentiment this month is particularly significant."
