UK business confidence has weakened further as retail sales continue to fall below typical seasonal levels, according to the latest Distributive Trades Survey from the Confederation of British Industry (CBI).
The findings point to a broad slowdown in trading conditions across the UK retail sector, driven by subdued consumer demand and ongoing cost pressures.
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The survey shows that sales volumes in June 2026 remained well below expected seasonal norms. It reports that performance “fell short of seasonal norms to the greatest extent in over two years”, highlighting how far current trading conditions have diverged from historical patterns.
Industry data compiled by Trading Economics UK CBI Distributive Trades Data supports the view that retail activity has remained under pressure, with limited signs of recovery in underlying demand.
Retail slowdown
Retailers reported weaker-than-expected sales across multiple categories, suggesting a broad-based slowdown rather than isolated weakness in specific segments.
The CBI’s monthly survey, which tracks retail and wholesale trading conditions, indicates that sales volumes continue to lag behind typical seasonal performance.
The report notes that this gap between expected and actual sales has widened in recent months. For many firms, trading conditions in June were described as more difficult than usual for the time of year, reinforcing concerns that consumer demand is failing to recover at a steady pace.
This weaker performance is now among the most pronounced in over two years, underlining the scale of the slowdown affecting UK retail businesses.
Demand pressure
Consumer behaviour remains a central factor behind the weaker sales environment. The CBI attributes the downturn to “depressed consumer sentiment and climbing cost pressures”, which continue to influence household spending decisions.
Retailers are reporting that higher operating costs are making it harder to maintain margins in an environment of subdued demand. At the same time, cautious consumer spending is affecting both essential and discretionary purchases.
The combination of cost inflation and weak demand has led to softer order volumes, with businesses adjusting expectations for near-term trading conditions. Pricing strategies are also becoming more restrained as competition increases in a low-growth environment.
Outlook weakens
Forward-looking indicators in the June survey show that business confidence has deteriorated further. The CBI states that “business growth expectations hit their weakest level this year”, reflecting growing uncertainty across the retail and distribution sectors.
Firms are increasingly cautious about the coming months, with limited confidence in a near-term rebound in consumer demand. This reflects ongoing concerns about household spending power and persistent cost pressures affecting business operations.
The full dataset and analysis are available via the CBI Media Centre report CBI Distributive Trades Survey June 2026, which details trading conditions, expectations, and sector-level performance across the UK retail economy.
