Brit retail sales fall well below expectations in August

By

Barbara Santamaria

Published
Aug 29, 2017

A new survey has revealed that the UK retail industry experienced slow sales in August, disappointing expectations that growth would hold broadly steady this month.

According to the latest quarterly CBI Distributive Trades Survey, the retail sales balance fell to -10% in August, marking the lowest performance since July 2016. This was well below expectations of +20% and below July’s performance of +22%. Orders placed with suppliers also fell considerably year-on-year, reaching a balance of -24%.

“Despite the warmer weather at the start of the month, retail sales have cooled as higher inflation continues to squeeze consumers’ pockets. Meanwhile, deteriorating sentiment regarding the business situation has combined with falling headcount among retailers,” said Anna Leach, CBI head of economic intelligence.

Sale sof non-foods increased by 45%. Footwear and leather retailers enjoyed a good month with sales volumes up 100%.

Looking ahead to September, the majority of retailers expect sales volumes to rebound compared to September 2016, but businesses continue to be cautious about the general economy and expect the business situation to continue to deteriorate over the next three months.

Nevertheless, investment intentions for the year ahead were mildly positive following two quarters of contraction. Meanwhile, average selling prices continued to rise strongly (+54%), although at a somewhat slower pace in the year to August.