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High street sales see summer fall

Retail sales fell in July at the fastest pace in more than four years, according to the Confederation of British Industry.

The CBI’s latest monthly Distributive Trades Survey of 132 firms, of which 66 were retailers, showed that sales volumes declined more rapidly than at any time since January 2012.

It said consumer confidence was a likely factor in the immediate period following the EU referendum.

Declining volumes

Companies expect sales volumes to decline at a broadly similar pace in the year to August.

Within retail, sales by grocers, and furniture and carpets stores were the main drivers of the drop in overall volumes

But some sectors bucked the trend, with non-specialised department stores and retailers of footwear and leather goods reporting higher volumes.

In tandem with a weaker retail sector, volumes in wholesaling deteriorated at the fastest pace since April 2013 and are expected to fall further next month.

Caution

“While conditions in the retail sector have weakened, we should be careful about reading too much too soon, as consumers were likely to err on the side of caution in the immediate period following a vote to leave the EU, said Rain Newton-Smith, chief economist of the CBI.

“Current low levels of inflation and high overall employment should support consumer spending in the near term, although the impact of lower sterling is likely to feed through to higher inflation over time.

“What businesses and consumers need now is calm and decisive leadership, a clear timetable and a plan for negotiating the UK’s future outside the EU to restore confidence.”

 

 

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