UK retailers said that sales fell for the third consecutive month in July and they expect next month to deliver worse figures, but the slowdown in consumer spending appears to be bottoming out.
Some 32% of retailers said that sales volumes improved, year-on-year, in July, but 47% said they fell, the CBI's Distributive Trades Survey revealed. The net balance of 15% of retailers reporting falling sales was better than the forecast of negative 21% and was a 2% improvement on June's figures.
In July, the star performers were footwear and leather retailers, with a net balance of 64% growing sales — the best performance since August 2007.
While the overall CBI figures were disappointing compared to the 1.2% retail sales rise between May and June, according to the Office of National Statistics, a number of retailers have recently posted buoyant figures to suggest the worst of the downturn is over.
Richard Lowe, the head of retail and wholesale at Barclays Commercial Bank, said: “The CBI's findings stand in contrast to the good news received last week from the ONS stats, but do little to affect the signs that declining retail sales are bottoming out.”
Andy Clarke, the chairman of the CBI Distributive Trades Panel, and Asda's chief operating officer, said: “Many retailers are having a difficult summer and no pick-up is expected in August.
“But the overall sales falls are not as heavy as we saw at the start of the year, and some retail sectors are reporting growth.”
According to the CBI, a net balance of 19% of wholesalers posted falling sales in July, but this was far less severe than the balance of 36% being down in June. Similarly to pessimistic retailers, a balance of 38% of wholesalers expect sales to be lower in August.