Christmas sales see unexpected boost but expected to fall again
Sales in the run-up to Christmas saw an unexpected rise, but this momentum is not expected to continue in the new year.
The latest Distributive Sales Study from the Confederation of British Industry (CBI) reported that sales balance rose to +11 in December, well above predicted readings of -24.
The sales balance is the weighted difference between the percentage of retailers who report an increase against those who report a decrease.
However, the CBI said that this increase is unlikely to last.
Martin Sartorius, principal economist at the CBI, said: “It’s encouraging to see retail sales surprise by growing this month, but any festive cheer is expected to be short-lived. Retailers are bracing themselves for the chill winds that will blow through the sector this winter, with consumer spending set to be hit hard by high inflation in 2023.
“The decision by the UK Government to freeze business rates from April provides some welcome relief to the retail sector. However, retailers also need to see long-term sustainable growth measures from the Government to encourage investment and address ongoing labour shortages.”