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Retail sales growth picked up in the year to November after growth largely stalled in October, according to figures from the Confederation of British Industry (CBI).
However, the group said retailers are “feeling the pinch”, with continued weakness in investment intentions, employment, and business optimism. That’s according to the latest CBI ‘Quarterly Distributive Trades Survey’.
Figures show 36% of respondents said that sales volumes were up in the year to November, while 17% said they were down, giving a balance of 19%. Yet Investment intentions for the next 12 months compared with the last 12 months in November were roughly flat (-3%) following a decline in in August (-10%).
The survey of 104 firms, of which 47 were retailers, showed sales volumes grew at a pace broadly in line with the long-run average in the year to November. Retailers expect sales volumes to expand at a roughly similar pace in the year to December.
Additionally, employment in the retail sector declined for the eighth quarter in a row in the year to November, but at a slower pace than in the year to August.
Orders placed on suppliers recovered in the year to November, following a fall in October, and are expected to grow at a similar pace next month. However, sales remained below average for the time of year, although to a lesser degree than last month.
Retail sales growth was driven primarily by grocers (48%), with notable support from non-store (internet and mail order) (23%) and durable household goods (67%). However, sales volumes fell in the clothing (15%), footwear and leather -31%), furniture & carpets (25%), and hardware and DIY sub-sectors (22%).
The group added that momentum in the retail sector is likely to remain “relatively subdued going forward”, as firms continue to grapple with weak household income growth and structural changes posed by digital disruption.
Anna Leach, CBI head of economic intelligence, said: “While it is encouraging to see headline retail sales growth strengthen in November after a weak outturn in October, the quarterly survey continues to paint a gloomy picture of the sector. Business sentiment remains poor, investment intentions are flat, and headcount continues to decline.
“Firms have been resilient during this period of seismic uncertainty, protecting livelihoods across the country, but it has nonetheless cost investment and jobs, hitting the most vulnerable hardest. So, the increase to the Annual Investment Allowance and the business rates reform for SMEs is a small mercy for our high streets.”
