UK retailers report strong pre-Xmas demand, biggest price rises since 1990
LONDON (Reuters) – British retailers reported the strongest pre-Christmas demand since 2015 this month but also the biggest price rises since 1990, as fears of shortages led shoppers to buy gifts early, figures from the Confederation of British Industry showed.
The CBI said its monthly retail sales balance – which looks at whether retailers think annual sales growth is rising or falling – rose to a three-month high of +39 in November from +30 in October.
But a separate measure of sales for the time of year leapt to +35 from -1, its highest since September 2015.
“Christmas seems to have come early for retailers, with clothing and department stores in particular seeing a big upward swing in sales volumes in November,” CBI economist Ben Jones said.
Although the survey of retailers indicated stock levels were adequate for the first time in seven months, previous shortages of some goods appeared to have made shoppers want to make their purchases earlier this year, he added.
The most recent official data, for October, showed retail sales rose on the month for the first time since April. British retail sales surged in March and April when shops reopened after a lockdown, but then fell steadily as other businesses reopened and consumers faced a wider range of spending options.
The data also add to evidence of surging price pressures in Britain, which may push the Bank of England to raise interest rates next month for the first time since the start of the COVID-19 pandemic.
Retailers reported the most widespread rise in prices since May 1990, and expected a similar increase for the following month.
Employment in the sector – which has been under long-term pressure from online retail – also rose for the first time since November 2016.
“Overall, retailers are becoming more optimistic, with both employment growth and investment intentions picking up strongly. Cost pressures remain a very real concern, however,” Jones said.
(Reporting by David Milliken; Editing by Alistair Smout)