Retailers are expecting growth to return in the year to December, with their strongest expectations in seven months, a CBI Distributive Trends survey has found.
This is despite retailers reporting broadly unchanged sales volumes in the year to November after six consecutive months of declining annual sales.
Business conditions are expected to remain stable over the next three months and total employment was broadly flat in the year to November, with the strongest growth in part time employment in five years counterbalanced by a further fall in full-time employment.
However, orders placed upon suppliers fell for the seventh consecutive month, and at a faster pace than in October.
This means retailers are once again planning to spend less on investment next year than they did this year.
Anna Leach, CBI’s deputy chief economist, said: “Retailers are entering the festive season with a bit of hope that sales will head up, with the strongest expectations in half a year. Actual sales have also stabilised and have nudged above average for the time of year. And employment has stopped falling after three years of decline. But Brexit uncertainty continues to weigh on investment plans for the year ahead which remain weak.”
Adding: “As the election period gets into full swing, retailers will welcome the prominence being given to fixing the broken business rates system. But it will be up to the next Government to turn warm words into action.”
Across the economy more broadly, growth has been volatile during 2019, as activity has shifted in response to moving Brexit deadlines, and underlying momentum has slowed.
38% of respondents reported that sales volumes were up on a year ago in November, while 41% said they were down, giving a balance of -3%, the highest balance in 7 months.
Retailers said they expected sales volumes to increase in the year to December (+21%), with 44% expecting a rise and 23% expecting a fall.
Orders placed upon suppliers fell for the seventh consecutive month in annual terms. 32% reported an increase while 42% reported a fall, giving a rounded balance of -9%.
Those surveyed said they expect a recovery in orders growth next month of 12%.