The Confederation of British Industry (CBI) reported on Thursday its
latest survey of retailers revealed that the retail sales volume balance plunged
to -23 in the year to January 2023 from +11 in December 2022. That was the
worst reading since April 2022 (-35) and pointed to a steep decline in retail sales
volumes at the beginning of the year.
Economists had forecast the reading to fall to -5.
The report also showed that the retail sales volumes are seen to decline
again in February, but at a slower rate (-15). In other survey results, orders
placed upon suppliers declined at a sharper pace in the year to January than in
the year to December (-32 from -21 in December) but are forecast to fall at a slower
rate next month (-19). Retailers considered stocks in January as elevated
relative to expected sales, and to a greater extent than in December (+23 from
+16 in December). Stock positions are seen to ease in February, but to remain
“too high” (+12).
Commenting on the latest survey, Martin Sartorius, principal economist
at the CBI, noted that a return to falling retail sales volumes at the start of the new
year indicated that the sector continues to face the twin headwinds of rising
costs and squeezed household incomes.