Retail sales tumbled in October at their fastest since the financial crisis, disappointing expectations for a solid expansion, according to the latest monthly CBI Distributive Trades Survey.
In a survey of 49 retail businesses, 15% said that sales volumes were up in October on a year ago, whilst 50% said they were down, giving a balance of -36%.
This significantly undershot expectations of +23% and was the steepest fall in sales volumes since March 2009 (-44%) during the financial crisis.
Meanwhile, orders placed on suppliers also dropped at the fastest rate since March 2009.
But internet sales volumes continued to expand at a healthy pace (+45%) albeit slower than in the year to September (+54%).
Looking ahead to the next month, retailers expect sales volumes to stabilise in the year to November, but orders are expected to see a further decline, albeit at a slower pace.
CBI chief economist Rain Newton-Smith say: “It’s clear retailers are beginning to really feel the pinch from higher inflation. While retail sales can be volatile from month to month, the steep drop in sales in October echoes other recent data pointing to a marked softening in consumer demand.
“This is a critical time for a sector that employs three million people across Britain. The Government can give retailers, especially those on the High Street, some much needed relief in next month’s Budget by bringing forward the planned switch of business rates indexation from RPI to CPI.”