Proactive Investors - Retail sales saw their largest November fall since the height of Covid, according to the latest survey from accountant BDO.
High street sales dropped 5.8% with both online and store purchases seeing hefty declines.
Black Friday weekend coming a week later than last year accounted for the weakness, BDO said, but reduced household spending was also a feature.
Sophie Michael, head of retail and wholesale at BDO, said: “Concerns around increasing energy bills over the winter and homeowners remortgaging to more expensive deals compared to a few years ago despite the fall in interest rates since the start of the year.
“It is a perfect storm of events and uncertainty that has clearly resulted in consumers being more cautious with their spending.”
According to BDO, online sales were down 7.8pc last month compared to a year earlier, while in-store sales fell by 5.5pc. BDO said the fashion sector was performing particularly poorly with sales 8pc lower than last year.
Michael warned that retailers were facing “an even tougher first quarter in 2025 should this sales trajectory continue into the final weeks of this year”.
BDO’s survey follows a warning from more than 80 retail sector bosses that tax rises announced in the recent Budget would hit the sector hard.
Michael said: “The industry has been very vocal about the detrimental impact that some of the measures announced in the autumn Budget will have on their cashflow and on their bottom line from next spring.”
Shares in sector leader Next PLC (LSE:LON:NXT) were unchanged at 10,105p while Marks & Spencer dipped 0.4% to 381.2p.