According to the most recent Confederation of British Industry (CBI), the Distributive Trades Survey offers a thorough overview of retail trends, the UK’s retail sector saw a decline in sales volumes for the year ending in June, reversing the modest growth noted last month.
After a slight increase in May, retail sales volumes fell throughout the year to June. The weighted balance dropped from 8% to minus 24%. Retailers predict a minus 9% drop in sales next month but at a lower rate.
Sales recorded a weighted balance of negative 39% as opposed to 2% in May, which was much lower than the average for this time of year.
The CBI predicts that while sales volumes will likely continue to fall short of seasonal averages in July, the size of the deficit will likely diminish to minus 29%.
Besides, from January to June orders with suppliers decreased gradually, keeping pace with the previous month.
There was a minor variation in the weighted balance from minus 11% in May to minus 14%. Retailers anticipate further order reductions for the upcoming month, with a projected drop of minus 16%.
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, notably, internet retail sales fell sharply in our survey, too.
Stock positions were reported as broadly ‘adequate’ to expected sales, with a weighted balance of 3%, down from 16% in May. Retailers expect stock positions to remain unchanged next month, with a balance of 0.
Consumer fundamentals are improving, with inflation now at the Bank of England’s 2% 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, Alpesh added.
