UK’s retail sales growth slowed sharply in the year to December due to Omicron, disappointing last month’s expectations for a further acceleration, according to the latest CBI monthly Distributive Trades Survey. Sales are expected to grow at a similarly lacklustre pace in the year to January. Sales were in line with seasonal norms in December, well above typical levels in November.
Sales were seen as broadly average for the time of year (-2 per cent from +35 per cent last month) and are expected to be poor for the time of year next month (-11 per cent). Stock levels in relation to expected sales saw a positive balance for the first time since February 2021 (+22 per cent from -2 per cent last month).
Orders placed upon suppliers grew at a faster pace than last month (+55 per cent from +30 per cent), but growth is expected to ease in the year to January (+25 per cent). Internet sales were broadly flat in the year to December (+3 per cent from -14 per cent; average is +44 per cent) but are expected to decline in January (-23 per cent).
UK’s retail sales growth slowed sharply in the year to December, disappointing last month’s expectations for a further acceleration, according to the latest CBI monthly Distributive Trades Survey. Sales are expected to grow at a similarly lacklustre pace in the year to January. Sales were in line with seasonal norms in Dec, well above typical levels in Nov.
The survey of 109 companies, including 41 retailers, saw a general deterioration in reported and expected sales growth across the distribution sector following the announcement of Plan B measures on December 8. Over half of firms that responded before the announcement reported that sales were ‘up’ on last year. This figure fell to one third for those that responded on or after December 8.
Orders placed with suppliers grew at a faster pace in the year to December than in November, with a slower rate of growth expected next month. Stock levels in relation to expected sales were reported as more than adequate for the first time since February this year and they are expected to be broadly adequate in January 2022. Anecdotes received from respondents indicate that retailers are building inventories to mitigate ongoing pressures, although some continue to struggle to do so, as per the CBI survey.
Meanwhile, wholesalers reported that sales growth slowed in the year to December, with similar growth expected next month.
Ben Jones, CBI lead economist, said: “Our December survey confirms what we’ve been hearing anecdotally about Omicron’s chilling impact on activity on the High Street, with retail sales growth slowing and expectations for the coming month sharply downgraded.
“On the supply side, retailers have been making progress in building up stocks, which were seen as more than adequate to deal with expected demand over Christmas. The concern now is the potential for rapidly rising sickness and staff absences to cause renewed disruption to supply chains in the New Year.
“It’s crucial that the government takes steps to help society live confidently with the virus, including meaningful dialogue between business, government and unions to assess the impact of restrictions and the need for future support.”
Fibre2Fashion News Desk (KD)