CBI: June retail sales show signs of halting their slide

RETAIL sales fell in June for the second month in a row after a bumper April, according to the Confederation of Business Industry&rsquo;s (CBI) distributive trades survey released yesterday. <br /><br />The balance of retailers reporting a rise in year-on-year sales volumes remained at -17 per cent in June, but above the average level of -26 per cent for the first five months of 2009.<br /><br />But while the data indicated that the retail sector is still being stung by rising unemployment and credit constraints, conditions are not getting any worse. <br /><br />Capital Economics&rsquo; Vicky Redwood notes the June figure is consistent with solid annual growth of around two per cent of the official sales measure.<br /><br />She adds the rise in the balance measuring orders placed with suppliers to its highest level since May 2008 was also encouraging, suggesting that the adjustment to retailers&rsquo; stocks is largely complete.<br /><br />For the second month running, the balance of retailers saying volumes of stocks were more than adequate to meet demand was below the long-term average, with a balance of +6 per cent &ndash; the lowest since June 2007.<br /><br />Citigroup&rsquo;s Michael Saunders said: &ldquo;The contrast between sluggish retail sales growth and the sharp drop in the share of retailers with excess inventories makes it clear that the pace of destocking recently has been really aggressive.&rdquo;<br /><br />Retailers are generally pessimistic about July, with a balance of -21 per cent expecting sales to fall slightly faster next month.