Britain’s biggest retailers have been ramping up their stockpiling efforts to record levels in the run-up to Brexit, according to the Confederation of British Industry.
The country’s leading business lobby group said retailers’ stock levels compared with the volume of expected sales had risen to the highest point in October since it began compiling retail sales estimates in 1983.
The CBI said the spike came as retailers built up their stocks before the Christmas shopping period and as fears lingered over a no-deal Brexit in advance of the EU granting an extension until 31 January.
It said retailers had stocked more seasonal products earlier than usual amid concerns that a disruptive withdrawal from the EU could have delayed delivery of European goods. Some major firms have stockpiled beer, wine and spirits to keep the alcohol flowing at Christmas, including champagne.
Against a backdrop of heightened Brexit uncertainty, retailers had been concerned that the 31 October deadline would clash with the buildup to the busiest shopping period of the year, when warehouse space and seasonal labour is already in high demand without the added complication of any potential border disruption.
Rain Newton-Smith, the chief economist at the CBI, said: “The timing could not be worse: the run-up to Christmas is a crucial time of year for the retail sector and not knowing where we will be on 1 November is adding more strain to an already beleaguered sector.”
The analysis of the CBI survey of 82 firms, which included 41 retailers, as well as motor traders and wholesale distributors, showed sales declined for a sixth consecutive month in October – the longest period for sliding sales since the financial crisis.
Sales volumes in the year to October dropped by 10% from the same period a year ago, while retailers said they expected sales volumes to be broadly flat – with a rise of about 1% forecast for November.
In a reflection of the challenges facing high street retailers, the CBI said online sales growth increased in the year to October, with the volume of goods sold up 49% compared with the same period a year ago.
Some economists said the CBI figures were much gloomier than the official measurement of retail sales from the Office for National Statistics, which in recent months has painted a more resilient picture of consumer spending.
Samuel Tombs, chief UK economist at the consultancy Pantheon Macroeconomics, said the survey had a small sample size and a bias towards traditional high street retailers, which had been hit hard amid the shift to online shopping.
