UK retail sales decline accelerates in July 2024: CBI survey

Retail sales volumes in the UK fell at an accelerated rate in the year to July, according to the latest Confederation of British Industry (CBI) Distributive Trades Survey. This marks the second consecutive month of declining annual sales, with retailers attributing the downturn to unfavourable weather conditions and market uncertainty.

The survey revealed that retail sales volumes declined more sharply in July compared to June, with a weighted balance of minus 43 per cent, down from minus 24 per cent the previous month. Looking ahead, retailers anticipate the sales downturn to persist into August, although at a slower pace, with an expected decline of 32 per cent.

Retailers have continued to report disappointing sales for this time of year. The weighted balance stood at minus 36 per cent in July, slightly improved from minus 39 per cent in June. Sales volumes are expected to remain below seasonal norms in August, albeit to a lesser extent, with a forecasted balance of minus 21 per cent, as per the survey.

Orders placed with suppliers also fell at a much faster pace in the year to July, with a significant drop to minus 40 per cent from minus 14 per cent in June. Retailers predict that this reduction in orders will continue into next month at a broadly similar pace, expecting a decline of minus 38 per cent.

Stock positions have reached their highest levels since June 2023, with a balance of 32 per cent, up from 3 per cent in June. Retailers expect these high stock levels to persist in relation to expected sales next month, with a forecasted balance of 21 per cent.

Wholesale sales volumes also contracted at a firm pace in the year to July, with a balance of minus 21 per cent, compared to minus 12 per cent in June. This trend is expected to continue, with wholesale sales predicted to fall at a broadly similar rate next month, with an anticipated balance of -19 per cent.

“July marked a disappointing month for the distribution sector, with retailers feeling the sting from a harsh mix of unfavourable weather conditions and ongoing market uncertainty. While the downturn in sales volumes is set to continue next month, some firms expressed hope for an improvement in market conditions post-general election. The sector will now look for the new government to deliver on its bold reform agenda outlined in the King's Speech to supercharge growth to effectively aid households' finances and offer market stability," said Martin Sartorius, principal economist, CBI.

Fibre2Fashion News Desk (DP)