UK retail sales improve in November, but market remains stale

Retail sales growth saw a slight uptick in the year to November, after a stagnating in October. But Brexit uncertainty still looms large over the industry as consumer confidence wanes.

Shopping centre
Source: Bloomberg

UK retailers are witnessed a slight uptick in sales in November, but the sector is braced for a tough few months ahead as Brexit uncertainty remains a cause for concern for the sector, with the industry reluctant to make investments or hire more staff, according to a recent CBI survey.

Of the 104 retailers surveyed, 36% said that sales volumes in the year to November had improved, while 17% reported that figures had fallen, representing a 19% increase on October’s performance, according to the survey.

‘While it is encouraging to see headline retail sales growth strengthen in November after a weak outturn in October, the quarterly survey continues to paint a gloomy picture of the sector,’ CBI Head of Economic Intelligence Anna Leach said. ‘Business sentiment remains poor, investment intentions are flat, and headcount continues to decline.’

Brexit uncertainty casts shadow on retail sector

Employment in the retail sector has steadily declined for the eighth quarter in a row in the year to November, as retailers look to manage costs amid a challenging environment as Brexit uncertainty looms large over the sector.

Meanwhile, retailers’ investment intentions remained relatively flat, according to those surveyed, following two consecutive quarters of falling investment.

And, despite the Christmas period likely to offer retailers a sales boost, many firms operating in the space remain reluctant to make ambitious investment decisions with many expecting the business environment to get worse in the first quarter of 2019.

‘Firms have been resilient during this period of seismic uncertainty, protecting livelihoods across the country, but it has nonetheless cost investment and jobs, hitting the most vulnerable hardest,’ Leach said. ‘So, the increase to the Annual Investment Allowance and the business rates reform for SMEs is a small mercy for our high streets.’

‘What’s needed now is securing a transition period that will remove a calamitous ‘no deal’ cliff edge and provide firms with breathing room,’ she added. ‘The Withdrawal Agreement is hard won progress; let’s not go backwards.’

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Find articles by writer