UK retail sales volumes in year to June declined 9% following a decrease of 10% in the year to May, expected to remain unchanged in July; stock volumes are projected to remain elevated relative to expected sales next month: CBI

LONDON , June 29, 2023 (press release) –

Retail sales volumes fell for the second month running in the year to June, as difficult trading conditions persist in the sector according to the latest CBI Distributive Trades Survey. However, retailers expect sales volumes to stabilise next month.

The key survey findings included:

• Retail sales volumes continued to decline in the year to June (weighted balance of -9% from -10% in the year to May) but are expected to be unchanged next month (0%).
• Orders placed upon suppliers declined in the year to June, but at a slower pace than last month (-10% from -30% in May). Orders are expected to fall at a broadly similar pace next month (-9%).
• Retailers reported the firmest stock positions since May 2020 (+33% from +25% in May). Stock volumes look set to remain elevated relative to expected sales next month (+26%).

Martin Sartorius, CBI Principal Economist, said:

"Another contraction in sales volumes attests to the difficult trading environment being faced by the retail sector. Households’ finances are still under pressure from high inflation, which means that demand conditions for retailers are likely to remain challenging in the coming months.

"Retailers continue to be disproportionately affected by the business rates system when compared to other sectors. There is a real opportunity – and a real need – to redesign the relationship between businesses, local authorities, and the communities they both serve."

In addition, the data showed:

• Internet sales volumes rebounded in the year to June (+26% from -9% in May) and are expected to maintain a broadly similar pace of growth next month (+27%).
• Retail sales volumes were reported as “average” for the time of year (+1% from -18% in May) and are expected to remain broadly in line with seasonal norms next month (-2%).
• Elsewhere in the distribution sector, wholesale volumes in the year to June fell at a quicker pace than last month (-15% from -5% in May). Wholesalers expect volumes to continue to contract next month but at a slower pace (-8%). Meanwhile, motor traders also reported falling sales in the year to June (-11% from -33% in May), with the decline in sales expected to accelerate next month (-21%).

This survey included 140 companies, including 59 retailers.

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