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UK retail stocks supply hits 35 year record low

·3 min read
UK retail stocks supply hit 35 year record low
Growth in retail sales and orders accelerated in the year to October, compared with the year to September, according a new CBI survey. Photo: Mike Kemp/In Pictures via Getty

UK retail stocks supply fell to the lowest levels since 1985 in October, according to the latest monthly Confederation of British Industry (CBI) Distributive Trades Survey.

Stocks in relation to expected sales reached a survey record low for the seventh consecutive month, falling to -31% from -23% month-on-month.

Many retailers are suffering from ongoing supply chain issues due in part to a shortage of delivery drivers in the UK.

Supply chains have been hit by a "double whammy" of drivers going back to their home countries either due to uncertainty over new Brexit rules or COVID-related restrictions which has lead to a major shortage.

Trade bodies have estimated the UK currently has a shortage of about 100,000 heavy goods vehicle (HGV) drivers.

Earlier in October, shipping bosses warned that shoppers should plan ahead for Christmas amid delays at ports, with almost £1.5bn ($2bn) in goods hit by delays in the run-up to the festive season.

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Cory Bros head Peter Wilson told the BBC that there may be less choice on the shelves because of the global supply chain slowdown, advising people to order items in a "timely fashion".

Growth in retail sales and orders accelerated in the year to October, compared with the year to September, according to the survey.

Retail sales grew by 30% in the year to October, up from 11% last month, with growth expected to accelerate further in November.

However, the CBI noted that this may reflect a comparison with October 2020, when sales and orders both fell amid a rising COVID-19 caseload and a tightening of social restrictions.

The pace of internet sales growth for the year to October slowed further below the long-run average rate, but this may also reflect the fact that COVID restrictions in October 2020 prompted consumers to turn to online shopping in greater numbers.

Ben Jones, CBI 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.

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"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.

The CBI is calling on the government to support the retail sector at this time. 

The industry body wants the chancellor, Rishi Sunak, to use his upcoming budget and spending review to "signal the government’s intent to reform the outdated business rates system, starting with more frequent revaluations and removing any disincentives for investment in energy efficiency and decarbonisation".

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