UK retail sales volumes experienced a drop in July 2025 marking the tenth consecutive month of decline amid subdued demand and economic uncertainty, according to the Confederation of British Industry’s (CBI) monthly Distributive Trades Survey.
The outlook indicates that this downward trend in annual sales volumes will continue at a similar rate into August.
Retail sales volumes “contracted at a strong rate” in July, although the pace of contraction was slow, with a weighted balance of -34% compared to -46% in June..
Retailers predict that the decline in sales will maintain a comparable pace in August at -31%.
When evaluating sales against seasonal expectations, retailers considered July’s performance as “poor”, but less so at -10% than in the previous month.
Despite this slight improvement, projections for August suggest sales will fall further below what is typically expected for the season by -36%.
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By GlobalDataOnline retail sales experienced a slight increase in July, continuing a three-month trend of growth. This modest rise is expected to persist at 4% into August.
CBI principal economist Martin Sartorius said: “Firms reported that elevated price pressures – driven by rising labour costs – and economic uncertainty continue to weigh on household demand, which has contributed to sales volumes falling since October 2024. These trends of weak demand and uncertainty were mirrored across the wider distribution sector, with wholesale and motor trades also seeing declining sales.”
Wholesale trade saw a decrease in sales volumes by -32% for July, maintaining nearly the same rate as observed in June (-34%). Anticipations for August forecast a similar pace of decline of -30%.
The motor trade sector faced its most severe annual reduction in sales volumes since June 2020 during July at -77%, down from -37% in June, with motor traders bracing for another steep decline of -57% in August.
Overall distribution sales volumes, which include retail, wholesale, and motor trades, dropped sharply in July at an unchanged rate of -39% from the previous month.
The outlook for August suggests a marginally slower contraction of -34%.
“With long-term strategic ambitions outlined, the government must now seek to build shorter term confidence in its growth mission. It can do this by collaborating with business to deliver an Autumn Budget that acknowledges the burden firms are facing and sets clear policy delivery targets. This includes providing clarity on how the government will deliver its action plan to tackle regulatory barriers to growth, position businesses to invest in the people they need through a flexible Growth and Skills Levy, and find an appropriate landing zone for the Employment Rights Bill,” Sartorius stated.
