Retail sales have fallen at quickest rate since 2009 financial crisis
Sales fell at the quickest rate since March 2009 - the height of the financial crisis - with sales for the time of year considered to be slightly below seasonal norms, according to the CBI Distributive Trades Survey of 106 firms.
Meanwhile, orders placed with suppliers also dropped at the fastest rate since March 2009.
Overall, 15 per cent of retailers said sales were up in October compared with a year ago and 50 per cent said they were down, giving a rounded balance of minus 36 per cent and falling significantly below expectations of plus 23 per cent.
Looking ahead to next month, retailers expect sales volumes to stabilise in the year to November but orders are expected to see a further decline, albeit at a slower pace.
Growth in online sales slowed in the year to October to a pace just below the long-term average, but are expected to pick up slightly in the year to November.
Recreational goods and hardware and DIY performed well, but department stores and specialist food and drink retailers saw sales fall.
Motor traders saw a sharp decline in sales volumes, and expect a further fall in the year to November.
CBI chief economist Rain Newton-Smith said: “It’s clear retailers are beginning to really feel the pinch from higher inflation.
“While retail sales can be volatile from month to month, the steep drop in sales in October echoes other recent data pointing to a marked softening in consumer demand.
“This is a critical time for a sector that employs three million people across Britain. The Government can give retailers, especially those on the high street, some much-needed relief in next month’s Budget by bringing forward the planned switch of business rates indexation from RPI to CPI.”
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “Times are tough on the high street with the cost of goods rising, and consumers facing an inflationary squeeze.
“These latest numbers from the CBI will only add to the mixed economic signals to be digested by the Bank of England next week when it decides whether to increase interest rates for the first time in over a decade.
“Retailers will breathe a sigh of relief if the Bank chooses not to increase rates and further burden consumers with additional mortgage costs, at a time when they are already feeling a bit of a pinch.
“As we enter the key Christmas trading period, the retail industry is desperately in need of some festive cheer.”