UK retail sales drop for 3rd consecutive month

UK retail sales volumes fell for the third straight month in the year to August, though at a slower pace than in July, according to the CBI’s latest Distributive Trades Survey on Tuesday.

The survey indicated a weighted balance of -27 per cent in August, improving from -43 per cent in July. Retailers expect the downturn to ease further in September (-17 per cent).

Sales for the time of year were considered “poor” in August, but less so than the previous month. The outlook for September remains cautious, with expectations of continued but reduced sales disappointment.

Despite an increase in selling price inflation in August (30 per cent from 20 per cent in May), it remains below the long-run average of 41 per cent. Retailers anticipate price inflation to ease in September (15 per cent).

Investment and hiring plans are expected to be scaled back, with retail employment declining for the eighth consecutive quarter. The sector anticipates a moderate business deterioration over the next three months.

Overall, the total distribution sector, including retail, wholesale, and motor trades, experienced a moderate contraction in the year to August, but a slower decline is expected in September.