CBI says UK retailers see a bit of cheer ahead of Christmas
CBI monthly index of retail sales shows contraction in November, but rises to highest since April
November proved to be slightly more positive for the beleaguered UK high street, as retail sales rose to their best level in seven months, although uncertainty over the deadline for Brexit and a slowing economy tempered some enthusiasm among retailers ahead of Christmas, according to a survey on Monday.
The Confederation for British Industry's (CBI) monthly retail sales balance rose in November by seven points from the previous month earlier to -3 in November, its highest level since April and topping expectations for a reading of -10.
The CBI’s survey showed 41 percent of retailers said sales volumes were down compared with November last year, while 38 percent said volumes were up. However, 44 percent said they expected the improvement to continue, with an anticipated year-on-year rise in December, while only 23 percent said they expected December volumes to be worse.
“Retailers are entering the festive season with a bit of hope that sales will head up, with the strongest expectations in half a year,” said Anna Leach, deputy CBI chief economist said.
“Actual sales have also stabilised and have nudged above average for the time of year. And employment has stopped falling after three years of decline. But Brexit uncertainty continues to weigh on investment plans for the year ahead which remain weak,” she added.
British shoppers have proven reluctant to open their wallets, given the 12-percent slide in the pound against the euro since the Brexit vote in 2016, greater job uncertainty and the economy growing at its slowest pace in over six years, leaving retailers little option but to offer steep discounts.
The CBI said business conditions are expected to remain stable over the next three months and total employment was broadly flat in the year to November. However, orders placed upon suppliers fell for the seventh consecutive month, while retailers were once again planning to spend less on investment next year than they did this year.
Within the retail sector, grocers made the greatest positive contribution to the headline figure this month, the CBI said, adding that negative contributions came primarily from non-specialised stores, but also clothing and non-store retail.
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