CBI distributive trades survey: Britain's retailers are expecting a slow summer

 
Jessica Morris
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Warm weather helped clothing sales buck the trend (Source: Getty)

A widely watched industry survey has shown UK retailers expect sales volumes to weaken further next month, after an already disappointing performance in July.

The CBI distributive trades survey said 30 per cent of firms expect sales volumes to rise in the year to August, while 17 per cent said they expect them to fall, which gives a net balance of 13 per cent, or a two-year low.

It comes after 36 per cent of retailers said sales volumes rose in the year to July, as 15 per cent said they fell, giving a net balance of 21 per cent, below economists' expectations for 30 per cent.

Read more: ONS' retail sales are, at best, a partial truth and, at worst, misleading

Warm weather helped clothing sales rise at the fastest rate since January but the overall figure was weighed down by grocers and department stores, which experienced flat sales volumes.

"Summer trading is traditionally slower across the retail sector but warm weather can often provide a welcome boost, as we saw towards the end of June and the beginning of this month," Barry Williams, CBI distributive trades chairman and Asda’s chief customer officer, said.

"Despite the upbeat outlook for the UK economy, retailers are still finding conditions challenging and it’s certainly something every shopkeeper will need to keep an eye on."

"Meanwhile, the recovery in wage growth should help support growth further down the line."

Read more: The ONS' retail sales index is not twisting statistics

The good news is that economists say the underlying trend is still relatively decent, pointing out that the scores are broadly average for the time of year and are expected to remain so next month.

"The prospects for retail sales and consumer spending still look largely bright for the rest of 2015: Consumer confidence was at a 15-year high in June, inflation is negligible, earnings growth is improving and employment has risen appreciably overall (despite a relapse in the latest data)," Howard Archer, chief economist at IHS, said.

"Additionally, signs of a pick-up in housing market activity should be supportive to consumer spending through boosting demand for household goods and furnishings."

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