Retail sales slump amid new restrictions

New data from the CBI distributive trades survey has shown retail sales in October to fall to -23%.

After an 11% growth last month, new social distancing measures are taking a toll and retail sales are indicating the biggest drop in sales since June.

Grocery sales have remained flat whilst retailer stores are reporting a fall in sales. Furniture, DIY, and recreational goods are still strong as people spend more time at home.

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.”

Car sales this month have also fallen, the CBI reported: “After three months of rising sales, motor traders reported falling volumes in the year to October (-32%, from +24%). Sales volumes are expected to fall again next month (-16%).”