UK retail sector sales decline deepens in June as CBI survey signals broader slowdown
Britain's retailers are reporting a weaker start to the summer as sales fall further below seasonal norms in June. The latest readings add to evidence that consumer demand and wider business activity are slowing across the UK economy.
Highlights
- CBI's June retail sales balance falls to -54 from -46 in May, with the three-month average hitting a record low of -56 since 1983.
- Retail sales miss seasonal norms by the widest margin in over two years, reflecting weak consumer sentiment and heightened cost pressures.
- Sales declines in retail, wholesale, and motor trading coincide with manufacturing orders deteriorating at the fastest rate since September 2020.
June survey points to sharper retail weakness
As reported by the Confederation of British Industry, its monthly retail sales balance, which measures sales volumes over the past year, falls to -54 in June from -46 in May.The three-month average to June declines to -56 from -55, marking the lowest reading since the series began in 1983. CBI lead economist Martin Sartorius says retailers report a gloomy start to the summer, with sales missing seasonal norms by the widest margin in more than two years amid weak consumer sentiment and rising cost pressures.
Sartorius adds that the sharp year-on-year drop in retail sales is mirrored across the wider distribution sector, where wholesalers and motor traders also post firm declines in sales.
Broader pressure on the UK economy
The retail survey follows an unexpectedly weak reading from the closely watched S&P Global business surveys, which do not cover retail but are widely seen as an early signal for economic growth.A separate CBI survey published on Tuesday also shows British manufacturing orders deteriorating this month at the fastest rate since September 2020. Sartorius says businesses need clarity and stability from Britain's likely next prime minister Andy Burnham, along with policies that lower the cost of doing business.
Our earlier coverage of London equities highlighted a one-week high for the FTSE 100 and FTSE 250, supported by strong updates from financial and retail names and heightened takeover interest. It also noted that boards at companies such as easyJet pushed back against bids they viewed as undervaluing long-term prospects, suggesting deal momentum and a firmer FTSE could reflect narrowing valuation discounts in UK assets.
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