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Retail stockpiling hits 36-year high at ‘crucial’ time

In October, retailers’ stock levels compared with expected sales were at their highest point since 1983, as businesses continue to prepare for Brexit and the Christmas trading period, the Confederation of British Industry’s (CBI) latest Distributive Trends Survey shows.

Despite retail sales volumes and orders both falling for the sixth consecutive month in October – down by 10% and 4% year on year respectively – retailers’ stock levels in relation to expected sales were at their highest point since the survey launched 36 years ago.

Online sales growth, meanwhile, jumped from 33% in September 2019 to 49% in October, and retailers expect “similar” growth in November.

The survey also showed that retailers expect sales volumes to be “flat” next month (1%) and for orders to deteriorate by 22%.

CBI chief economist Rain Newton-Smith said: “Retailers have now endured six months of falling sales, the longest period of decline since the financial crisis.

“The sector is struggling with ongoing digital disruption, layered on top of cost pressures from a weak pound and the cumulative burden of an outdated business rates regime.

“Retailers have also had to contend with the looming Brexit deadline, which has partly driven a record spike in stocks.

“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.”

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