High Streets Initiative Fred Heritage · 27 October 2017
Retail sales fall sharply amid softening consumer demand
UK retail sales have fallen sharply in the year to October, disappointing expectations for solid growth in the sector, according to data from the Confederation of British Industry (CBI). The latest monthly data from the CBI’s Distributive Trades survey revealed that UK retail sales have fallen at the fastest rate since March 2009 the peak of the financial crisis in the year to October. A survey of over 100 firms, half of which were retailers, revealed that orders placed with UK suppliers were also found to have fallen at the fastest rate since March 2009. The research found current levels of retail sales to be slightly lower than what’s considered the ‘seasonal norm? for this time of year. Ecommerce sales growth slowed to a level slightly below the long-term UK average in the year to October. However, this is expected to increase in November as the Christmas shopping period approaches. Amongst retailers, businesses selling recreational consumer goods, as well as hardware and DIY tool sellers, performed well. Department stores and specialist food and drink outlets, however, saw overall sales figures decline. Wholesale businesses reported above average sales growth in the year to October, with that strong growth expected to continue in the coming months. Commenting on the data, chief economist at the CBI, Rain Newton-Smith, said that retailers were beginning to feel the pinch? of higher inflation. while retail sales can be volatile from month to month, the steep drop in sales in October echoes other recent data pointing to a marked softening in consumer demand, he added. this is a critical time for a sector that employs three million people across Britain. The government can give retailers, especially those on the high street, some much needed relief in next month’s Budget by bringing forward the planned switch of business rates indexation from RPI to CPI.
ABOUT THE EXPERTFred Heritage
Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.