UK retail sales slowed further -and with more to come- in July, with the sales volume gauge falling to +11% from +42% in the month before, well below what retailers themselves (+32%) and analysts (+15%) had been expected , according to the latest data from the Confederation of British Industry.
That means that sales were still up on year ago levels. Firms also reported growth in orders (+5%), although once again at a much slower pace than had been expected (+21%).
For August retailers expect both sales and orders growth to moderate further, with both expected to be effectively flat on a year ago (sales +3%, orders -1%).
As well as seeing slower growth, sales continued to be below average for the time of year (-14%), while, relative to expected demand, stock levels also rose (+21%, from +11% in June).
According to Judith McKenna, Chair of the CBI Distributive Trades Panel and Asda Chief Operating Officer:
"Retailers reported an annual rise in sales and orders for the third month in a row, but the increase was far slower than firms had anticipated.
"The unprecedented poor weather for the time of year did not help, but retailers also expect conditions to remain tough during August. With consumer confidence weak and wage growth remaining sluggish, the longer term outlook for retailers remains challenging."
Commenting on the data this afternoon analysts at Barclays Research are of the following opinion:
"Today's data support the view that the sharp increase in the balance observed in June, which was boosted by the Queen's Diamond Jubilee, was temporary and the underlying conditions in the sector are weak. We expect activity in the high street to remain subdued in the coming months as consumers continue to rein in spending. As long as consumers continue to face a tough labour market, slow earnings growth and an uncertain economic outlook, we think it is unlikely we will see a significant pick-up in household spending and subsequently, retail sales."
Datafeed and UK data supplied by NETbuilder and Interactive Data.
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