The latest monthly Distributive Trades Survey from the Confederation of British Industry (CBI) unveiled a continuing downturn in the retail industry.
Sales volumes experienced a sharp decline for the eighth consecutive month, marking a challenging festive period for the sector.
According to the survey, retail sales volumes in the year to December 2023 fell at an accelerated rate compared to the previous month, with a weighted balance of -32%, a considerable drop from -11% in the year to November.
The outlook for the new year appears gloomy, as retailers anticipate an even sharper contraction in sales in January. Key findings from the survey include a faster-paced decline in sales volumes, with an expectation for an even quicker rate of decline in the coming month (-41%).
Retailers expressed concern as December sales volumes were deemed below the "average" for the time of year, anticipating that volumes will fall well short of seasonal norms in the upcoming month (-37%).
Martin Sartorius, CBI principal economist, said:
"The retail sector ended 2023 on a glum note, with the ongoing downturn in sales volumes deepening during the crucial holiday trading period. Looking ahead, retailers are bracing themselves for a New Year's chill, as sales are set to fall at an even quicker pace next month.
"Strained household finances and higher interest rates continue to take a toll on consumer spending, suggesting that retailers will have to navigate a tough demand environment in the months to come. In this context, a hike in business rates for many retailers, alongside a rise in the National Living Wage, will heap more pressure on the sector in the new year."
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