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.’