Retail sales volumes in the U.K. fell at an accelerated rate in July, marking the second consecutive month of annual decline. Retailers cited unfavorable weather conditions and market uncertainty as key contributing factors to the July decline.
The latest Confederation of British Industry (CBI) Distributive Trades Survey reveals that retailers are expecting the sales downturn to continue in August, though at a slower pace. U.K. retail sales volumes fell to -43 percent from -24 percent in June with retailers expecting sales to fall at a slower rate of -32 percent next month. Notably, sales remained below seasonal norms in July and this trend will likely continue into August but to a lesser extent.
“July marked a disappointing month for the distribution sector, with retailers feeling the sting from a harsh mix of unfavorable weather conditions and ongoing market uncertainty,” stated Martin Sartorius, principal economist, CBI.
In addition, the survey reveals that supplier orders in July fell at a much faster pace of -40 percent from -14 percent in June. Retailers expect the decline in orders to continue next month at a broadly similar pace.
“While the downturn in sales volumes is set to continue next month, some firms expressed hope for an improvement in market conditions post-general election,” Sartorius added.
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Meanwhile, U.K. wholesale sales volumes contracted at a firm pace in the year to July (-21 percent from -12 percent in June) and will likely fall at a broadly similar rate next month (-19 percent).
“The sector will now look for the new government to deliver on its bold reform agenda outlined in the King’s Speech to supercharge growth to effectively aid households’ finances and offer market stability,” Sartorius added.
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