Retail sales fell at their sharpest rate in October since the height of the financial crisis in 2009, although wholesalers and internet sales volumes bucked the downward trend.
Some 15% of retailers said that sales volumes were up in October on a year ago, whilst 50% said they were down, giving a rounded balance of -36%, according to the latest CBI Distributive Trades Survey. This significantly undershot expectations (+23%) and was the steepest fall in sales volumes since March 2009 (-44%).
Sales volumes decreased in specialist food & drink retailers (-32%) and non-specialised goods (ie department stores) (-45%).
However, 58% of wholesalers reported sales volumes to be up, and 11% down, giving a balance of +47%, while internet sales volumes continue to expand at a healthy pace (+45%).
Rain Newton-Smith, chief economist at CBI, 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.”