According to the CBI’s latest monthly Distributive Trades survey – which interviews 280+ retailers a month from a variety of retail sectors – retail sales growth was disappointing in June, confirming the underlying slowdown in consumer spending seen since last year.
Retailers’ expectations that growth would continue to pick-up were not met and sales growth remained weaker than the mean balance of the past decade for the eighth successive month, said the CBI report.
Thirty nine per cent of respondents said sales were up while 29 per cent said they were down. The balance of plus 10 per cent follows a balance of plus 14 per cent in May. These results are an improvement on those seen in the winter, but are well down on the average of plus 33 per cent seen in the first six months of last year.
A build up of stocks in May combined with disappointing demand in June caused mainstream retailers to cutback orders with suppliers. Most retail sectors reported some growth in the year to June, the exceptions were specialist food, chemists and stores selling furniture and carpets.
Alastair Eperon, Chairman of the CBI’s Distributive Trades Panel, said: "The retail picture for June is particularly disappointing. Consumer spending should have been much higher when compared with June 2002 when high street spending suffered as a result of the Jubilee Bank Holidays, late half term and the World Cup. With growth continuing to slow in July, there is nothing in this survey to stop the Bank of England cutting interest rates next week."
Sales of new cars were down on 12 months earlier for the eleventh month in a row. Motor traders are relatively pessimistic about the outlook for July, expecting sales to fall at a significantly faster rate than they did in June, said the CBI report.