UK retail sales hit their highest level since 1990

UK retail sales hit their highest level since 1990

The CBI said that retail sales rose significantly in November since May 1990 because of fears of gift shortages over Christmas.

Retailers reported the strongest sales for the time of year since September 2015 and said they expected the level to remain above seasonal norms to a similar extent next month.

The CBI s distributive trades survey questioned 125 companies including 51 retailers, which showed that year-on- year retail sales growth accelerated this month, while internet sales fell for the first time since the survey asked that question in 2001.

The results reflected the tightening of Covid 19 restrictions in November 2020 that weighed on overall volumes but pushed up internet sales growth as consumers who were stuck at home went on a digital shopping spree.

The CBI, which claims to speak on behalf of 190,000 businesses, said the monthly balance of retail sales rose to their highest level since September 2015, at 35 per cent, above the consensus of 33 per cent.

Ben Jones, the CBI's lead economist, said: Christmas seems to have come early for retailers, with clothing and department stores seeing a big upward swing in November. He said that reports of supply chain disruptions appeared to have prompted consumers to start their Christmas shopping early, while efforts by retailers to keep their shelves full seemed to be paying off, with stock levels regarded as adequate for the first time in seven months.

The retailers are more optimistic, with both employment growth and investment intentions picking up strongly. He added that selling prices are growing at the fastest pace since 1990 and are a real concern for cost pressures.

The balance of 35 per cent for retail sales this month compared to - 1 per cent last month, while those surveyed said they expected demand to remain above seasonal norms by a broadly similar balance of 32 per cent.

Gabriella Dickens, economist at Pantheon Macroeconomics, said: The figures may not be as positive as they first appear. The rise in the headline balance is due to base effects, as consumption dropped sharply last November after the introduction of Covid restrictions. Retail sales rose for the first time since March and April when the reopening of shops after a lock down caused a surge in sales and a fall as other businesses opened, giving consumers a greater choice of places to spend their money, according to the most recent official data from the ONS. The data also showed evidence of significant price pressure in Britain, which economists believe will push the Bank of England to raise rates next month for the first time since the start of the epidemic.

Retailers reported prices were at their fastest pace since May 1990, and expected a similar rate of increase next month, according to the CBI survey.

Employment in the sector, which has been under long-term pressure from online retail, rose for the first time since November 2016. Retailers said they expected business conditions to improve over the next three years by a balance of 8 per cent, up from 6 per cent in the last quarter.

The survey was conducted between October 27 and November 16. The balance is the weighted difference between the percentage of retailers reporting an increase and the percentage of retailers reporting a decrease.

The balance of 18 per cent was higher than the previous balance of 31 per cent and was the lowest since May, although stock levels were said to be too low for the eighth month in a row.