Retail sentiment in the UK deteriorated sharply in November, marking the steepest decline in 17 years as budget-related uncertainty and prolonged weak demand continued to weigh on the sector. The distributive trades survey reveals a retail environment under significant pressure, with sales volumes falling rapidly and retailers anticipating another month of subdued demand. November's sales were judged poor by seasonal standards, and firms expect December to be similarly disappointing.

The downturn is shaping business decisions as investment intentions remain deeply negative for the third consecutive year, and hiring plans have weakened further as firms brace for a challenging winter. Sentiment has fallen dramatically, with a weighted balance of minus 35 percent for business conditions, reflecting widespread concern about the economic and policy outlook.

There are, however, pockets of resilience. Online retail sales continued to grow and are expected to surge in December, reflecting shifting consumer behaviour. Selling price inflation is also easing, offering some relief after months of price pressures.

Indeed, the latest updates reveal that the sector is struggling with fragile demand, policy uncertainty, and rising operational caution, yet still adapting through digital channels as households remain highly selective in their spending.

The Confederation of British Industry (CBI) produces a monthly survey (and a more detailed quarterly report) analysing the performance of the UK retail, wholesale and motor trade sector. Volume sales, orders on suppliers, sales for the time of year and stocks are all covered and the quarterly survey also covers imports, selling prices, numbers employed, investment and business situation. Financial markets tend to concentrate on the CBI's annual sales growth measure as a leading indicator of the official retail sales report.

This survey is a leading indicator of consumer spending because retailer and wholesaler sales are directly influenced by consumer buying levels. The monthly update provides a vital update on volume of sales, orders and stocks. Like the industrial survey, it carries significant weight in the formulation of economic policy at the Bank of England and within government as a highly respected barometer of high street trade. It is considered to be an advance indicator of retail sales although it is not well correlated with the official data on a monthly basis.