Retail Sales Take a Tumble—No Spree in Sight
According to the latest CBI Distributive Trades Survey, retail sales volumes dropped faster than analysts expected in the year to June, undoing the modest uptick that slipped into May. Retailers are bracing for another dip in July, but at a slower rate.
Key Takeaways
- Year‑to‑June sales fell by 24% from the +8% spike in May, hitting a low of -39% relative to the seasonally averaged +2% in May.
- Expectations for July: a -9% drop in volumes and a -29% decline relative to seasonal norms.
- In the same period, orders dropped by 14% (down from -11% in May), with a projected -16% slump for July.
- Stock levels, while now deemed “adequate” (+3% vs +16% in May), are expected to stay flat in July.
- Online sales took a hard hit: -45% in June (from -6% in May), with a modest -5% dip projected next month.
CBI Highlights the Chill
Afternoon bang! Alpesh Paleja, CBI Interim Deputy Chief Economist, warned that June’s cold snap could have dented footfall. He also noted:
- Inflation has finally met the Bank of England’s 2% goal.
- Real incomes are rising, yet households still feel the phantom toll of the cost‑of‑living crisis.
- Consumer demand remains shaky—only a bit of market confidence left.
Proposed Relief for Retailers
Paleja called for bold interventions from incoming leadership, including:
- A holistic cross‑economy overhaul of Britain’s tangled business rates system, which is a particular pain for retailers.
- Clear, cost‑saving measures that make the UK the most attractive place to start, grow, and run businesses.
Bottom line: The retail sector is holding its breath—and a chill. With the market edifying pieces in place, retailers might just keep their shelves (and spirits) stocked for the road ahead.
