Survey shows sales growth slowing below expectations
Growth in high street sales slowed to a seven-month low in June after a poor month for clothing and grocery retailers, the CBI has said.
The business lobby group's latest distributive trades survey shows 29% of retailers reported sales volumes up on a year ago, while 24% said they were down, giving a balance of just 4%. The balance in May was 16%. The June reading was the seventh consecutive month of growth, but the reading was "markedly" below expectations of 29% and was the lowest balance since November.
The economic recovery has been driven by consumer demand, but sluggish wage growth has raised questions about its sustainability.
The survey of 133 firms was conducted between May 28 and June 12 – the first day of the World Cup – and shows clothing sales fell for the first time since January.
Annual sales growth for grocers also slowed for the second month running as supermarkets remain in the grips of a major price war.
Survey panel chairman Barry Williams, chief merchandising officer for food at Asda, said the fall in clothing and food sales contributed to a disappointing month.
However, he is encouraged that retailers expect a faster rise in sales next month, with a balance of 17%.
Mr Williams added: "I'm reassured that consumer confidence is still on the up, as household budgets are being bolstered by falling inflation."
Average wages grew by 0.7% in the three months to April, according to the Office for National Statistics, while the Consumer Prices Index measure of inflation was 1.5% in May down from 1.8%.