LONDON (Reuters) – British retailers reported a downturn in already weak sales this month as consumers feel the squeeze from high borrowing costs and inflation, and they are gloomier about the start of 2024, a Confederation of British Industry survey showed on Thursday.
The CBI’s monthly retail sales balance, a gauge of sales over the year to December, dropped to -32 from -11 in November.
Expected sales for the next month also fell sharply to -41 – the weakest since a record low of -62 in March 2021 – from -6.
“Strained household finances and higher interest rates continue to take a toll on consumer spending, suggesting that retailers will have to navigate a tough demand environment in the months to come,” Martin Sartorius, principal economist at the CBI, said.
An increase in business rates for many retailers and a rise in the minimum wage would put more pressure on the sector in the new year, Sartorius said.
The survey showed retailers reporting sales volumes further below average for the time of year and stock volumes were judged to be too high for expected sales in December. Orders placed upon suppliers fell at the quickest rate since May 2020.
(Reporting by William Schomberg)
