Consumers are feeling the pressure from rising borrowing prices and inflation, and they are more pessimistic about the start of 2024, according to a Confederation of British Industry study released on Thursday.
According to Reuters, the CBI’s monthly retail sales balance, which measures sales from January to December, fell to -32 from -11 in November.
Expected sales for the upcoming month decreased drastically from -6 to -41, the lowest since a record low of -62 in March 2021.
“Strained household finances and higher interest rates continue to take a toll on consumer spending, suggesting that retailers will have to navigate a tough demand environment in the months to come,” Martin Sartorius, principal economist at the CBI, reported Reuters.
According to the study, shops reported sales volumes lower than typical for this time of year, and stock levels were deemed excessively high for expected sales in December. Orders to suppliers declined at the fastest rate since May 2020.