Shortages of retail products hit a level not seen for more than 35 years in October as stock failed to keep pace with rising demand, a survey showed.
Retail sales growth accelerated in the year to October from a month earlier and were about average for the time of year, the Confederation of Industry said. Sales are expected to be above seasonal norms in November.
Stock adequacy fell for the seventh month running to a new low for the CBI’s survey since 1985. Retailers, distributors and wholesalers all reported stock shortages. The UK has been hit by shortages of products on store shelves caused partly by a lack of lorry drivers following Brexit.
Chancellor Rishi Sunak has said he is confident there will be enough presents in shops and that supply-chain problems were global. UK ports such as Felixstowe have suffered logjams and reports have suggested consumers are buying presents early to avoid missing out.
Retailers are also under pressure from staff shortages and waning consumer confidence following petrol shortages and rising cases of Covid-19. A recent survey showed consumer sentiment dropping sharply and spending power will be hit by benefit cuts and rising energy prices.
Ben Jones, the CBI’s principal economist, said: “The UK’s economic recovery has been pretty bumpy lately and the same seems true of the retail sector. Sales performance has jumped around in recent months, while stock shortages continue to bite.
“Disruption to supply chains, combined with staff shortages and uncertain public health conditions mean retailers are finding it difficult to plan for the winter ahead.”
Jones said Sunak should support reform of the UK’s outdated business rates system in his budget on Wednesday.
Samuel Tombs, a UK specialist at Pantheon Macroeconomics, said: “Retail sales aren’t likely to be buoyant in Q4, given the twin hits to households’ incomes this month from higher energy prices and the withdrawal of government support, such as the furlough scheme and the £20 per week uplift to Universal Credit. Some shoppers might not be able to purchase the goods they want over the coming months, given that stock levels in relation to demand fell again.”