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Steepest fall in retail sentiment in 17 years - CBI Distributive Trades Survey

25 November 2025

BUDGET WORRIES DRIVE STEEPEST FALL IN RETAIL SENTIMENT IN 17 YEARS – CBI DISTRIBUTIVE TRADES SURVEY

Sentiment amongst retailers fell at the sharpest rate in 17 years, with a growing share of firms expecting their business situation to deteriorate over the coming quarter – according to the CBI’s latest quarterly Distributive Trades Survey.

Retail sales volumes fell at a fast pace in the year to November, extending a period of weakness that goes back to mid-2023. Retailers expect demand to remain subdued heading into December, with sales set to fall again, albeit at a somewhat slower pace.

With demand still weak and uncertainty mounting ahead of the Budget, retailers plan to pull back on both investment and hiring. Investment intentions remain historically weak and have now been negative for three-and-a-half years. In the near-term, firms also expect to trim headcount at a slightly faster pace next month.

Key findings included:

  • Retail sales volumes fell at a fast pace in the year to November (weighted balance of -32% from -27% in October) but are expected to decline at a somewhat slower rate next month (-24%).
  • By seasonal standards, November’s retail sales were judged to be “poor” (-25%), to a somewhat greater extent than in October (-15%). December’s sales are set to disappoint seasonal norms to a comparable degree (-18%).
  • Sentiment among retailers worsened in November to the greatest extent in 17 years, with firms expecting their business situation to deteriorate over the coming quarter (-35% from -10% in August).
  • Retailers expect to reduce capital expenditure over the next 12 months (compared to the previous 12 months) to the same degree as reported in August (-42%). Investment intentions remained poor by historical standards (long-run average of -3%).
  • Retail employment declined again in the year to November (-19% from -14% in August). Headcount is expected to fall at a marginally quicker pace next month (-23%)
  • Retail selling price inflation fell closer to its long-run average in the year to November (+46%), slowing from a much faster rate in August (+65%), and bucking the trend of accelerating price inflation seen this year so far. Retailers anticipate selling price growth to ease again next month (+40%).
  • Total distribution sales volumes (including retail, wholesale, and motor trades) fell significantly in the year to November at a slightly quicker rate to October (-35% from -30% in October). Sales are set to decline at the same pace next month (-35%).

Alpesh Paleja, Deputy Chief Economist, CBI, said:

“Retailers continue to grapple with a long spell of weak demand, as households remain cautious around day-to-day spending. With all eyes on the forthcoming  Budget, uncertainty in the run-up has meant that businesses are holding back on plans for investment and hiring.

“The Chancellor must avoid pulling the business tax lever once again, at risk of further curtailing firms’ efforts to build a more resilient, dynamic economy. Businesses want bold decisions to wrestle back the government’s fiscal headroom and get the economy on a solid path to prosperity. This includes finding a landing zone for the Employment Rights Bill that doesn’t harm job prospects or shortchange economic growth.”

In addition, data from the survey showed:

  • Online retail sales volumes grew in the year to November at a moderate pace and for the second month in a row (+13% from +4% in October). Retailers expect online sales to surge in December (+50%), marking the strongest expectation since May 2021.
  • Retailers’ orders placed upon suppliers declined in the year to November at a similarly firm pace to October (-25%, from -28%). Retailers expect to reduce orders at a faster rate next month (-34%).
  • Retailers reported that stock volumes relative to expected demand were broadly in line with the long-run average (+18% from +14%; long-run average of +17%) and are expected to broadly stay in this position in December (+16%).
  • Wholesaling’s annual sales volumes fell in November at the same pace as October (-31%). The rate of decline is expected to remain steady next month (-34%).
  • Motor trades sales volumes contracted at an accelerated rate in the year to November (-55% from -29% in October) and are expected to plummet next month (-66%).