Retail sales fall sharply as new restrictions dampen economic recovery
Retail sales fell sharply this month as new coronavirus restrictions dampened the UK’s economic recovery, according to the latest research.
In the year to October retail sales dropped to a balance of minus 23 per cent, from growth of 11 per cent last month, according to the CBI distributive trades survey.
Retail sales have been growing since non-essential stores were allowed to reopen in June, however the introduction of new Covid-19 restrictions are taking a toll on the sector’s recovery.
Grocery volumes were flat after five months of strong growth during the coronavirus pandemic, while clothing stores were among those that reported falling sales.
However sales of furniture, DIY and recreational goods remained strong, indicating that the interior design and renovation trend that gained traction as people stayed at home during lockdown has continued.
Orders placed with suppliers fell for the 18th consecutive months – and at the fastest pace since June, according to the survey of 116 firms.
Ben Jones, CBI principal economist, said: “The fall in retail sales in October is a warning sign of a further loss of momentum in the economy as coronavirus cases pick up and restrictions are tightened across many parts of the country.
“It’s no surprise that sales have dipped despite no new direct restrictions on retail in England, as the evidence from earlier in the year suggests consumers become more cautious as case numbers rise.
“With footfall still down by one third, many retailers face a difficult run-up to the all-important Christmas period. It is vital that local authorities use their discretion over the new Tier 2 grant funding to target support in a way that helps keep town and city centres open for business.”