Retail sales volumes continue to fall - CBI monthly Distributive Trades Survey

Retail sales volumes continued to fall slightly in the year to July, marking the fourth consecutive month in which volumes have failed to grow, according to the latest CBI Distributive Trades Survey. Retailers expect sales volumes to decline at a quicker rate in the year to August.

They key survey findings included:

• Retail sales volumes fell at a modest pace in the year to July (balance of -4% from -5% in June). Next month, retailers expect sales to decline at a faster pace (-14%).
• Retail sales were seen as poor for the time of year in July, but to a lesser extent than in June (-9% from -19% in June). Sales are expected to remain similarly weaker than seasonal norms next month (-6%).
• Retailers’ orders placed upon suppliers in the year to July fell at a slightly quicker pace than last month (-13% from -8% in June). The decline in orders is expected to accelerate further next month (-28%).
• Internet sales volumes continued to contract in the year to July, at a broadly similar pace to last month (-37% from -38% in June). This marks the sixth consecutive monthly fall in internet sales. In August, the decline in internet sales is set to slow down (-22%).
• Stock levels in relation to expected sales were viewed as “too high” by retailers in July (+29% from +12% in June), to the greatest extent since July 2020. Stock positions are expected to remain “too high” next month (+25%).
• Wholesale sales volumes fell in the year to July (-13% from +4% in June) for the first time since March 2021. Wholesalers expect the decline in sales to accelerate slightly next month (-18%). Motor trade sales volumes fell in the year to July (-37% from +8% in June). This decline is expected to continue at a similar pace in August (-37%).

Martin Sartorius, Principal Economist, said:

“Retail activity continues to take a hit as consumers struggle to cope with the effects of the cost-of-living crisis.

“For wholesalers, high inflation and weakening economic momentum has meant that sales volumes have now fallen following a solid period of growth stretching back to March 2021.

“The Government needs to act to inspire business confidence and stimulate growth. Fundamentally reforming both business rates and the apprenticeship levy are crucial starting points to encourage investment, which will play a key role in improving living standards in the long-term.”