UK retailers saw a significant drop in sales this month as high inflation continued to put pressure on household budgets.
A survey by the CBI found that in the year to November retail sales declined by 19%, down from an 18% rise in October.
The data does not include Black Friday or Cyber Monday, which are likely to boost sales for this month. However, consumers are clearly cutting discretionary spending so they can afford essentials such as food and energy.
UK inflation is currently at a 41-year high of 11.1%.
Retailers expect sales to shrink 21% in December — a crucial period for many shops — and remain pessimistic about the business situation over the next three months. This is reflected in declining employment numbers and deteriorating investment intentions.
“It’s not surprising that retailers are feeling the chill as the UK continues to be buffeted by economic headwinds,” commented Martin Sartorius, principal economist at the CBI.
“Retailers and wholesalers contribute £352bn to the UK economy and support a fifth of the nation’s jobs — yet these survey results underline what a tough time it is for the sector.”
Sartorius welcomed Chancellor Jeremy Hunt’s decision to freeze business rates for another year but said that retailers are also looking for longer-term measures from the government that can “restore momentum to the UK economy”.
