Retailers reported a moderate fall in year-on-year sales volumes for December, according to the latest CBI Distributive Trades Survey. This marked the third month in a row in which annual sales declined.
Firms do not expect their fortunes to turn around in January, as they anticipate sales volumes to contract again.
Key Findings Included:
Retail sales volumes declined in the year to December at a moderate rate (weighted balance of -15% from -18% in November). The sales downturn is expected to ease slightly in January (-11%).
Sales volumes were judged to be ‘poor’ for the time of year, to a similar extent as in the previous month (-23% from -22% in November). Retailers expect sales to remain below seasonal norms in January, but to a lesser degree (-18%).
Internet sales volumes declined modestly in the year to December (-8% from -12% in November). Retailers expect online sales to grow at a gentle pace next month (+6%).
Total distribution sales volumes (includes retail, wholesale, and motor trades) fell at a fast pace in the year to December (-30% from –17%). Firms expect sales to contract at a broadly similar rate in January (-33%).
Martin Sartorius, Principal Economist, CBI, said: “Retailers have endured a gloomy festive period, with annual sales declining for a third consecutive month. Looking ahead, retailers expect sales to fall again in January, while wholesalers and motor traders are braced for sharper sales declines."
“Firms across the distribution sector will be glad to see the end of a difficult 2024, but the new year is not set to bring relief. Measures announced in the Budget will push up businesses’ employment costs, and consumer spending is expected to remain modest as incomes growth slows."
“The Government can take steps to support firms’ confidence by implementing a faster, more transformative timetable for business rates reform and developing a long-term, modern industrial strategy to unlock innovation, attract investment and drive sustainable economic growth.”
In addition, data from the survey showed:
Orders placed upon suppliers declined at a stronger pace in the year to December (-26% from -13% in November). Retailers expect to reduce orders at an even quicker rate in January (-45%).
Retail stock volumes remained high relative to expected demand in December, (+13% from +21% in November; long-run average +17%). Stock positions are set to be broadly similar in January (+12%).
Wholesale sales volumes declined in the year to December at the fastest rate since January 2021 (-32% from -10% in November). Wholesalers expect an even sharper decline in sales next month (-36%).
Motor trades sales volumes fell in the year to December at the fastest pace since October 2022 (-58% from -38% in November). Motor traders anticipate sales will fall again in the year to January, marking the weakest expectation since June 2020 (-76%).
