British retailers turned slightly more optimistic about the outlook for their businesses in the coming months but sales continued to fall in November ahead of the key Christmas shopping season, a survey showed on Monday.

The Confederation of British Industry's (CBI) monthly retail sales balance, a gauge of sales over the year to November, picked up to -11 from a very weak -36 in October.

It was the seventh consecutive monthly negative reading for sales, reflecting the squeeze on many households from an inflation rate that is still running at 4.6% in the latest figures and the climb in borrowing costs.

However, sentiment amongst retailers improved with a net balance of +4 expecting their business situation to improve over the next three months, up from -14 in August and the second-highest reading in the quarterly series in two years.

"Though sentiment has picked up slightly, firms do not feel that a revival in activity is imminent," CBI Principal Economist Martin Sartorius said.

Retailers cut back on orders placed upon suppliers in the year to November but less sharply than in October. Orders were expected to decline a bit less slowly in December than businesses had expected for November.

The survey was based on responses from 53 retailers and was conducted between Oct. 27 and Nov. 14.

. Given the weakness in trading conditions, it’s little surprise that firms are scaling back on their investment ambitions.”


The survey, which is not seasonally adjusted, showed retailers cut orders to suppliers this month and expect to do so again in November.

Overall the survey added to a string of downbeat business surveys that point to stagnation, or even a shallow downturn, in economic output.

"As the festive period approaches, the retail sector remains in a perilous position," said Martin Sartorius, principal economist at the CBI.

"Sales volumes have been falling year-on-year for six months in a row, as cost-of-living concerns and higher interest rates weigh on consumer spending." (Reporting by William Schomberg)