According to a recent survey by the Confederation of British Industry (CBI), the retail industry in the UK is currently experiencing uncertain and challenging times. Despite a boost from Black Friday sales, the overall outlook for retailers has worsened in November. The CBI’s monthly report on distributive trades has revealed a significant decline in sales volumes this year, and retailers do not anticipate much improvement in December.

The key findings of the CBI survey indicate that retail sales have seen a decline compared to previous months. In November, the figure stood at -19%, which is a stark contrast to the +18% reported in October. Moreover, retailers expect a similar rate of decline for December, with an expected figure of -21%. It is important to note that these percentages represent the weighted difference between the number of retailers reporting an increase and those reporting a decrease in sales.

While sales volumes were considered average for this time of year, with a +3% figure in November (compared to +20% in October), retailers anticipate that sales will remain in line with seasonal norms in December, albeit with a slight contraction (-1%). The survey also highlighted a contraction in online retail sales, with a -5% figure in November (compared to -23% in October). This marks the 13th consecutive month of flat or declining internet sales, and a further decline of -26% is expected next month.

The employment growth in the retail sector has also been negatively affected, declining by -17% in November (compared to +13% in August). This represents the first decrease in headcount since August 2021, and retailers project a further decline of -12% next month. These declining employment numbers, along with deteriorating investment intentions, highlight the overall pessimism among retailers regarding their future business prospects.

Martin Sartorius, the CBI’s Principal Economist, has acknowledged the challenges faced by the retail sector, stating that it is not surprising that retailers are feeling the impact of economic headwinds in the UK. The decline in sales volumes and the overall pessimism among retailers are reflected in the worsening investment intentions, the most significant since May 2020. Sartorius emphasized the importance of the retail sector, which contributes £352 billion to the UK economy and supports a significant portion of the nation’s jobs.

While the Chancellor’s decision to support the freeze in business rates next April provides some relief, retailers are also seeking long-term measures from the government to revive the momentum of the UK economy. The CBI survey highlights the challenges and concerns faced by the retail industry and emphasizes the need for supportive measures to navigate these difficult times. Ultimately, the future of the sector will depend on the collective efforts of retailers and government policies aimed at fostering growth and restoring confidence in the UK economy.

Useful links:
1. BBC News – UK retail industry facing uncertain and challenging times
2. CBI – UK retail sales growth slows to six-month low