UK retail sales dip in June, more declines expected

British retail sales experienced a decline in June following a recovery in May, with retailers anticipating another drop in July, according to a survey by the Confederation of British Industry (CBI) released on Wednesday.

The CBI’s monthly retail sales balance, which compares sales volumes to the same period a year ago, fell sharply to -24 in June from +8 in May. Alpesh Paleja, the interim deputy chief economist at the CBI, attributed the decline partly to unseasonably cold weather in June, noting a significant drop in internet retail sales as well.

Official data revealed that retail sales had surged in May after heavy rains deterred shoppers in April. Despite average wages now rising faster than inflation and consumer sentiment in June reaching its highest point since November 2021, the CBI survey suggests challenging times ahead for retailers.

The survey’s outlook for July indicates a continued struggle, with the expected sales gauge showing a reading of -9, predicting a modest annual decrease in sales volumes. This is down from the -4 forecast for June in the previous month’s survey.

The CBI conducted the survey of 58 retail chains between May 24 and June 13, before a period of unusually warm weather at the end of the month.

Attribution: Reuters.