UK retail sales decline steeper than expected in June: CBI

The UK's retail sector has experienced a sharper-than-expected decline in sales volumes for the year ending in June, reversing the modest growth observed last month according to the latest Confederation of British Industry (CBI) Distributive Trades Survey, which provides a comprehensive overview of retail trends. Retailers predict that sales volumes will continue to decline next month, albeit at a slower rate.

Retail sales volumes decreased in the year to June, following a modest recovery in May. The weighted balance fell to minus 24 per cent from 8 per cent. Retailers anticipate a slower decline in sales next month, projecting a fall of minus 9 per cent.

Sales were significantly below the average for this time of year, with a weighted balance of minus 39 per cent compared to 2 per cent in May. Although sales volumes are expected to remain below seasonal norms in July, the extent of the shortfall is expected to lessen slightly to minus 29 per cent, as per CBI.

Orders placed with suppliers fell moderately over the year to June, maintaining a pace similar to last month. The weighted balance was minus 14 per cent, a slight change from minus 11 per cent in May. Retailers foresee continued cutbacks in orders for next month, with an expected decline of minus 16 per cent.

Stock positions were reported as broadly ‘adequate’ in relation to expected sales, with a weighted balance of 3 per cent, down from 16 per cent in May. Retailers expect stock positions to remain unchanged next month, with a balance of 0.

Internet sales saw a significant decline, falling at a faster pace than anticipated over the year to June. The weighted balance plummeted to minus 45 per cent from minus 6 per cent in May. However, online sales are expected to decrease slightly next month, with a projected fall of minus 5 per cent.

Alpesh Paleja, CBI interim deputy chief economist, said: “Last month’s nascent recovery in sales proved to be short-lived, with retailers reporting a faster-than-anticipated decline this month. Unseasonably cold weather in June may have played a role, but it’s notable that internet retail sales fell sharply in our survey, too.

“Consumer fundamentals are improving, with inflation now at the Bank of England’s 2 per cent target and real incomes rising. But it’s clear that households are still struggling with the legacies of the cost-of-living crisis, with the level of prices still historically high in some areas.”

Fibre2Fashion News Desk (DP)