Retail sales declined in the year to August, disappointing expectations that growth would hold steady, according to the latest quarterly CBI Distributive Trades Survey.
In a survey of 57 retailers, 34% said that sales volumes were up on a year ago, whilst 44% said they were down, giving a balance of -10% – the lowest since July 2016 (-14%).
This was below expectations of +20% and below July’s performance of +22%.
Year-on-year internet sales growth slowed, edging further below the long-run average, but growth is expected to pick up next month.
Meanwhile, 44% of wholesalers reported sales volumes to be up on last year, and 31% said they were down, giving a rounded balance of +14%, underperforming expectations (+23%).
Anna Leach, CBI head of Economic Intelligence, said that despite the warm weather at the start of August, retail sales cooled as higher inflation continues to squeeze consumers’ pockets.
“Meanwhile, deteriorating sentiment regarding the business situation has combined with falling headcount among retailers,” she added.
“Looking ahead, firms do expect sales growth to recover, but the pressures on household budgets are set to persist, given little sign of wages picking up.”
Looking ahead to next month, retailers expect sales volumes to rebound in the year to September, while orders are expected to stabilise.
Wholesale volumes are also expected to grow at a quicker pace next month (+28%).