UK retailers report fall in sales ahead of Christmas<\/p>\n
British retailers have suffered a slump in sales in the run-up to Christmas, and are gloomier about their prospects for the start of 2026, a new survey shows.<\/p>\n
In another sign that the UK economy is struggling, the Confederation of British Industry has reported that retail sales volumes fell at an accelerated rate in the year to December.<\/p>\n
This pulled the CBI\u2019s gauge of how retail sales compared with a year earlier worsened to -44 in December from -32 in November.<\/p>\n
The new year is expected to start on a gloomy note for the retail sector. Retailers anticipate that annual sales will fall sharply next month, with expectations at their weakest since March 2021.<\/p>\n
The CBI\u2019s survey was conducted between November 24 and December 11, involving 161 respondents including 60 retailers and 85 wholesalers.<\/p>\n
Martin Sartorius, principal economist at the CBI, says:<\/p>\n
\u201cRetailers reported that annual sales volumes fell rapidly in December, as weak consumer confidence contributed to softer trading conditions in the lead-up to Christmas. Firms do not anticipate any relief in the new year, with sales expectations deteriorating to their weakest in over four years. The gloomy retail outlook was mirrored across the wholesale and motor trades sectors, which also expect sales to continue falling in January.<\/p>\n
\u201cAgainst a backdrop of weak trading conditions, there is a clear need for government action to lower the cost of doing business. Progressing reforms to the business rates system, lowering crippling energy costs, and finding balanced solutions to the Employment Rights Bill through secondary legislation would help restore confidence and unlock vital investment.\u201d<\/p>\n
This gloomy outlook comes just hours after the Office for National Statistics reported a small fall in retail sales volumes in November (see earlier post<\/a>).<\/p>\n Share<\/a><\/p>\n Updated at\u00a007.41 EST<\/p>\n Key events<\/p>\n Show key events only<\/p>\n Please turn on JavaScript to use this feature<\/p>\n Closing post<\/p>\n Time to wrap up\u2026 (that mulled wine won\u2019t drink itself).<\/p>\n Britain\u2019s stock market has closed near a record high tonight<\/a>, as the traditional Santa Rally gathers pace.<\/p>\n Shares across Europe touched a new peak<\/a>.<\/p>\n But there was gloom in UK retail, with sales volumes falling slightly in November despite the Black Friday sales period.<\/p>\n In another blow, the CBI reported that December had begun with a slump in retail sales,<\/a> leading to downbeat forecasts for January.<\/p>\n UK government borrowing hit its lowest level for a November in four years, but was higher than expected.<\/p>\n Share<\/a>Share<\/a><\/p>\n Stocks are pushing higher on Wall Street too, where the Nasdaq Composite index is now up over 1%.<\/p>\n Peter Cardillo, chief market economist at Spartan Capital, in New York, explains why:<\/p>\n \u201cIt\u2019s been a challenging two weeks as the AI\/tech sector came under pressure, but we\u2019re beginning to see some stabilization. That should get the ball rolling for the Christmas year-end rally to resume.\u201d<\/p>\n Share<\/a>FTSE 100 share index closes near record high<\/p>\n Britain\u2019s blue-chip share index has closed near a record high tonight, as a dose of festive optimism sweeps the City of London.<\/p>\n The blue-chip FTSE 100 share index has ended the day up 59.65 points at 9,897 points, up 0.6%, approaching the record high of 9,930 points hit in November.<\/p>\n Engineering firm Rolls-Royce (+2.7%) and precious metals producers Endeavour Mining (+3.1%) and Fresnillo (+2.8%) led the risers, but retailers and housebuilders fell.<\/p>\n Stocks pushed higher despite some generally downbeat economic news today; retail sales fell slightly in November, and also in early December, while the UK borrowed more than expected last month.<\/p>\n Today\u2019s rally adds to Thursday\u2019s gains, when City traders welcomed the Bank of England\u2019s decision to cut interest rates, and anticipated more cuts in 2026.<\/p>\n The market also rose on Wednesday, after UK inflation fell by more than expected.<\/p>\n Danni Hewson, head of financial analysis at AJ Bell, explained earlier this week:<\/p>\n \u201cThere\u2019s now a plausible chance the 10,000 index level could be breached by the end of the year, if we get a bit of a Santa rally.<\/p>\n \u201cThere are a number of reasons why falling inflation is a boon for the stock market. It means a less constrained consumer, who can spend more on the goods and services of listed companies. It also means those companies themselves face lower costs, and in theory, that includes lower wage demands too, especially in a slowing labour market. Inflation heading back to target also suggests lower interest rates are on the cards, which would be good for companies with debt on their balance sheet, and for their customers\u2019 spending habits too.<\/p>\n So far this year, the FTSE 100 has rallied by 21%, a very strong year.<\/p>\n Share<\/a><\/p>\n Updated at\u00a012.09 EST<\/p>\n Nike is not joining today\u2019s stock market rally.<\/p>\n The sportswear retailer\u2019s shares are down almost 10% after it reported results last night which showed sales weakness in China.<\/p>\n Nike posted a 1% rise in global revenue, but investors are concerned that revenues fell by 17% in greater China.<\/p>\n Share<\/a><\/p>\n US consumer sentiment has risen a little this month, although Americans are still worried about affordability issues.<\/p>\n The University of Michigan\u2019s final December sentiment index climbed 1.9 points to 52.9.<\/p>\n Joanne Hsu, director of the survey, said in a statement:<\/p>\n \u201cDespite some signs of improvement to close out the year, sentiment remains nearly 30% below December 2024, as pocketbook issues continue to dominate consumer views of the economy.\u201d<\/p>\n Share<\/a>Stoxx 600 hits record high<\/p>\n The fabled Santa Rally appears to be breaking out in Europe\u2019s stock markets.<\/p>\n The pan-European Stoxx 600 share index has just hit new all-time high, up 0.22% at 586.68 points.<\/p>\n Share<\/a><\/p>\n Wall Street has opened higher on the final trading day of the week.<\/p>\n The Dow Jones Industrial Average rose by 87 points, or 0.21%, at the start of trading, with the S&P 500 up 0.33% and the tech-focused Nasdaq Composite rising by 0.5%.<\/p>\n Tech stocks are rising, with Oracle up 5.7%, and Micron gaining 5% after reporting strong results earlier this week.<\/p>\n Share<\/a><\/p>\n The CBI\u2019s distributive trades survey also found that retail sales for the time of year were judged to be \u201cpoor\u201d in December, to a greater extent than last month.<\/p>\n Next month\u2019s sales are set to similarly disappoint against seasonal norms.<\/p>\n Share<\/a><\/p>\n Updated at\u00a009.29 EST<\/p>\n Share<\/a>UK retailers report fall in sales ahead of Christmas<\/p>\n British retailers have suffered a slump in sales in the run-up to Christmas, and are gloomier about their prospects for the start of 2026, a new survey shows.<\/p>\n In another sign that the UK economy is struggling, the Confederation of British Industry has reported that retail sales volumes fell at an accelerated rate in the year to December.<\/p>\n This pulled the CBI\u2019s gauge of how retail sales compared with a year earlier worsened to -44 in December from -32 in November.<\/p>\n The new year is expected to start on a gloomy note for the retail sector. Retailers anticipate that annual sales will fall sharply next month, with expectations at their weakest since March 2021.<\/p>\n The CBI\u2019s survey was conducted between November 24 and December 11, involving 161 respondents including 60 retailers and 85 wholesalers.<\/p>\n Martin Sartorius, principal economist at the CBI, says:<\/p>\n \u201cRetailers reported that annual sales volumes fell rapidly in December, as weak consumer confidence contributed to softer trading conditions in the lead-up to Christmas. Firms do not anticipate any relief in the new year, with sales expectations deteriorating to their weakest in over four years. The gloomy retail outlook was mirrored across the wholesale and motor trades sectors, which also expect sales to continue falling in January.<\/p>\n \u201cAgainst a backdrop of weak trading conditions, there is a clear need for government action to lower the cost of doing business. Progressing reforms to the business rates system, lowering crippling energy costs, and finding balanced solutions to the Employment Rights Bill through secondary legislation would help restore confidence and unlock vital investment.\u201d<\/p>\n This gloomy outlook comes just hours after the Office for National Statistics reported a small fall in retail sales volumes in November (see earlier post<\/a>).<\/p>\n Share<\/a><\/p>\n Updated at\u00a007.41 EST<\/p>\n Insolvencies in England and Wales slow<\/p>\n Some encouraging economic news: the number of companies going bust in England and Wales has dipped.<\/p>\n There were 1,866 company insolvencies in England and Wales in November, which is 8% less than in October and 7% lower than in November 2024.<\/p>\n The Insolvency Service reports that monthly company insolvency numbers so far in 2025 have been slightly higher than in 2024, but lower than in 2023, when insolvencies hit a 30-year high.<\/p>\n Tom Russell, president of R3, the UK\u2019s restructuring, turnaround and insolvency trade body, says the slowdown in insolvencies could be a \u2018glimmer of hope\u2019 for businesses:<\/p>\n \u201cWhen considered alongside a drop in the inflation rate to 3.2% and the recent cut in the interest rate to 3.75% it may give a glimmer of hope to struggling businesses in the run up to Christmas and offer business owners some cautious optimism that conditions may begin to improve next year.<\/p>\n \u201cThat said, company insolvency levels remain stubbornly high compared to five years ago, reflecting difficult trading conditions. In addition, the unemployment rate has reached a near six-year high of 5.1% as employers have been delaying recruitment and investment decisions. Sustained progress on inflation and employment will be key to restoring confidence in the long term.<\/p>\n \u201cFor hospitality businesses especially, the next few weeks could make or break their business. Many face a sharp drop-off in trade after festivities end with January bringing cashflow pressures caused by the rent quarter and potentially larger supplier, VAT and payroll tax payments reflecting a busy December. Our members typically see an increase in enquiries and distress calls from this sector early in the New Year.<\/p>\n \u201cRetailers also face post-Christmas challenges, including high levels of returned goods at a time when wages and other costs still have to be met.\u201d<\/p>\n Share<\/a><\/p>\n The UK stock market is rather staggering towards Christmas.<\/p>\n The blue-chip FTSE<\/a> 100 shares inded is up a mere 2 points, or 0.02%, today at 9,839 points, less than 100 points off its alltime high.<\/p>\n Shares in UK housebuilders and retailers are falling through, suggesting some pessimism about the economic outlook after today\u2019s data.<\/p>\n AJ Bell head of financial analysis Danni Hewson says:<\/p>\n \u201cThe knife-edge nature of yesterday\u2019s rate decision by the Bank of England is keeping UK stocks in check and stalled the FTSE 100\u2019s push towards the 10,000 mark. Investors have responded to the reality that we could be approaching the end of the current rate-cutting cycle.<\/p>\n \u201cThis saw housebuilders lose momentum as hopes for a significant drop in mortgage costs in the coming months begin to fade away. An unexpected drop in retail sales only added to the gloom around the consumer backdrop in the UK.<\/p>\n