Key facts
- British retailers reported the smallest sales downturn in six months in July.
- The Confederation of British Industry's distributive trades balance improved to -26 in July from -54 in June.
- Sales were judged to be below normal for the time of year by the smallest amount since February.
- Wholesalers reported broadly unchanged sales volumes in July.
- Retailers' expected sales volumes for August improved significantly.
British retailers experienced the smallest decline in sales in six months during July, though overall sentiment remained subdued due to ongoing cost pressures, according to the Confederation of British Industry (CBI).
The CBI's distributive trades balance, a measure of sales activity compared to the previous year, increased to -26 in July from -54 in June, marking its highest level since January. Sales volumes were also judged to be less below normal for the season than in previous months, a trend not seen since February.
Despite the improved sales figures, CBI economist Martin Sartorius noted that a full recovery is still distant, with gloomy sentiment and elevated costs impacting activity. The CBI expressed hope that new Prime Minister Andy Burnham's growth initiatives would include reduced property taxes for high-street retailers and called for measures to address rising labor costs and maintain hiring flexibility.
In contrast to the CBI's findings, official data from the Office for National Statistics (ONS) last week indicated a 5.4% annual volume growth in retail sales excluding fuel for the year to June, boosted by summer weather encouraging purchases of seasonal items. The CBI survey, conducted between June 26 and July 14, included responses from 67 retail chains and 105 wholesalers.