The strength of the UK consumer tested as CBI reports flat sales volumes

UK retailers reported flat sales volumes in the year to June, but are optimistic about a pick-up next month, according to the latest Distributive Trades Survey from the CBI.

A quarter of firms reported an increase in sales volumes from a year earlier, while 24 per cent reported a decrease, giving a balance of plus one per cent (compared to expectations of plus ten per cent). This is significantly below the average balance for 2012 of plus 11 per cent.

But retailers are confident about next month, with a balance of plus 13 per cent forecasting an increase of year-on-year sales in July. Barry Williams, chair of the CBI Distributive Trades Survey panel, said that although retailers are more upbeat about July, falling real wages is likely to constrain family spending throughout the summer.

It’s worth noting that the CBI figures for sales volumes in June are more pessimistic than those published by the ONS for May last week, which noted a year-on-year rise of 1.9 per cent and a month-on-month increase of 2.1 per cent.

Where the ONS reported a 0.5 percentage point fall in food sales in May, the CBI noted a three per cent fall, rising to plus nine per cent in June – suggesting we could see a resurgence in the next set of food sales volumes published by the UK’s statistics authority.