Hopes on the high street of a pick-up in business during the pivotal Christmas period have been boosted by the latest retail health check from the CBI.
In its monthly distributive trades survey, the employers’ organisation said the broadly unchanged level of activity in November had broken a six-month-long streak of falling sales.
The peak Christmas shopping season starts with this week’s Black Friday offers, and the CBI said the stabilisation reported in its survey of 52 retailers provided some reasons for cautious optimism.
Anna Leach, the CBI’s deputy chief economist, said: “Retailers are entering the festive season with a bit of hope that sales will head up, with the strongest expectations in half a year. 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.
“As the election period gets into full swing, retailers will welcome the prominence being given to fixing the broken business rates system. But it will be up to the next government to turn warm words into action.”
The CBI survey, covering late October and the first half of November, said sales had been strong for supermarkets and footwear outlets but poor for department stores and clothes shops. The CBI said internet sales growth in the year to November eased to the slowest pace seen since June and was expected to remain at this below-average pace next month.
Official figures for retail sales from the Office for National Statistics have painted a more upbeat picture of consumer spending than the CBI survey, with activity supported by rising living standards. The latest official data, however, was unexpectedly weak.
Howard Archer, the chief economist for the EY Item Club, said: “The CBI survey offers the retailers genuine hope that consumers are prepared to loosen their purse strings for the critical Christmas period; and suggests that some of the recent lacklustre sales performance has been due to consumers taking a breather before splashing out over the festive season.”
