According to CBI, concerns about a shortage of gifts during the Christmas period caused retail sales in November to increase by the most since May 1990.
Retailers reported their strongest sales for the year since September 2015 and said they expect levels to remain above seasonal standards to a similar extent next month.
The CBI Distribution Industry Survey, which asked 125 companies, including 51 retailers, found that year-on-year retail sales growth accelerated this month, while sales via the internet fell for the first time since the survey asked that question in 2001.
The results reflect the tightening of Covid-19 restrictions in November 2020, which affected overall volumes but boosted internet sales growth as consumers stuck at home continued to stay at home. digital shopping.
The CBI, which declares on behalf of 190,000 businesses, said the monthly retail balance, which looks at whether sales were higher, lower or equal to last year, rose to its highest level since September 2015. , at an equilibrium of +35%, which is above the consensus of +33%.
Ben Jones, CBI’s lead economist, said: “Christmas seems to have come early for retailers, with clothing and department stores in particular seeing a big swing in the month. 11”.
He said reports of supply chain disruptions appeared to have spurred consumers to start their Christmas shopping early, while retailers’ efforts to keep their shelves full appeared to have paid off. public, with inventories for the first time in seven months.
“Overall, retailers are becoming more optimistic, with job growth and investment intentions both strong. However, cost pressures remain a very real concern, with selling prices rising at the fastest rate since 1990,” he added.
Retail balances are +35% this month compared to -1% last month, while those surveyed said they expect demand next month to remain above the seasonal benchmark at similarly broadly equal to +32%.
However, Gabriella Dickens, economist at Pantheon Macroeconomics, said: “The numbers may not be as positive as they first appear. For starters, the increase in headline balances is partly a result of fundamental effects, as consumption plummeted last November following the re-imposition of Covid restrictions. “
The most recent official data from the ONS showed retail sales rose in October for the first time since March and April, as stores reopening after closures boosted sales. stores, followed by a steady decline as other businesses open, giving consumers a better choice of where to spend their money. The data also provided further evidence of significant price pressures in the UK, which economists say could prompt the Bank of England to raise interest rates next month for the first time since the start of the pandemic.
According to the CBI survey, retailers reported price increases at their fastest rate since May 1990, and expect a similar rate of increase next month.
Employment in this sector, which has been under long-term pressure from online retail, also increased for the first time since November 2016. Retailers said they expect business conditions to improve in over the next 3 years with a balance of +8%, up from +6% in the previous quarter.
The survey was conducted between October 27 and November 16. Balance is the weighted difference between the percentage of retailers reporting an increase and retailers reporting a decrease. .
While the reserve level was deemed too low for the eighth consecutive month, the -18% balance is an improvement from the previous balance of -31% and the lowest since May.
