Retail sales volumes fell at a slower pace in the year to July, with the weighted balance rising to -26 per cent from -54 per cent in June, according to the CBI’s monthly Distributive Trades Survey published on Monday.
Retailers expect sales volumes to decline at a similar rate in the year to August, at -26 per cent.
The survey was conducted between 26 June and 14 July, with 191 firms responding: 67 retailers, 105 wholesalers and 19 motor traders.
Retailers separately judged July’s sales to be poor for the time of year, though to a lesser degree than in June, at -18 per cent against -40 per cent. August’s sales are expected to fall short of seasonal norms by a wider margin, at -29 per cent.
Online retail sales volumes fell in the year to July at a balance of -47 per cent, from zero in June. Retailers expect internet sales to fall at a similar rate in August, at -48 per cent.
Retail orders placed upon suppliers contracted at a faster pace, at -31 per cent from -26 per cent in June. Retailers expect the rate of decline to accelerate to -36 per cent next month.
Retail stock volumes relative to expected sales stood at +16 per cent, against +19 per cent in June and a long-run average of +17 per cent. Stock positions are expected to soften to +12 per cent in August.
Elsewhere in the distribution sector, wholesale sales volumes were broadly unchanged in the year to July, at +2 per cent from -20 per cent in June, ending 25 consecutive months of decline. Wholesalers expect sales to fall again in August, at -7 per cent.
Motor trades sales volumes grew at +57 per cent in the year to July, the fastest pace since April 2024, from -30 per cent in June. Motor traders expect growth of +50 per cent in August.
Total distribution sales volumes were broadly flat at +1 per cent, from -33 per cent in June, the strongest reading since May 2024. Sales are expected to contract at -5 per cent next month.
Martin Sartorius, lead economist at the CBI, said: “Retailers reported that the ongoing sales downturn lost steam in July, but a recovery still looks some way off as gloomy sentiment and elevated cost pressures weigh on activity. That said, conditions in the rest of the distribution sector were less downbeat, with wholesalers seeing stable volumes for the first time in over two years and motor trade sales rebounding.”
He added: “Distribution firms will welcome the Prime Minister’s focus on supporting local high streets and will be looking for broader business rates reform to address one of the key constraints on investment and growth. To deliver inclusive growth in every postcode, the government must also take further action to tackle rising labour costs while protecting labour market flexibility, so that the sector can continue to provide young people with rewarding routes into work.”
The government announced on 23 July that pubs, social clubs and live music venues in England will receive a 20 per cent cut to their business rates bills from April next year, in a package it values at around £100 million a year. Nearly 32,000 premises will benefit, saving the typical pub an estimated £1,100 in the next financial year, according to the announcement. Prime Minister Andy Burnham had set out the rates cut in an interview earlier in July before taking office.
The government said it would return to wider business rates reform, including small business rates relief, at the Budget. The Federation of Small Businesses has asked the Treasury to lift the relief threshold from £15,000 to £25,000 after an estimated 104,000 small business premises were brought into the rates regime in April.
Figures compiled by UHY Hacker Young show that employers’ National Insurance contributions rose by £28bn in the 12 months to 31 March 2026, a rise of 24 per cent.
In June’s survey, the CBI reported that retail sales for the time of year were judged poor to the greatest degree since January 2024.
The mean retail sales balance in the survey since July 1983 is +7 per cent.
