Retail sales volumes in the UK dropped sharply in June, marking the ninth consecutive month of decline, according to the Confederation of British Industry’s (CBI) monthly Distributive Trades Survey.
The annual sales balance fell to –46%, down from –27% in May. Looking ahead, retailers expect a further drop in July to –49%, as caution among consumers persists.
decline in retail trade extends across wholesale and motor sectors
In June, retailers judged sales volumes to be “poor” for the time of year, with a seasonal balance of –37%, worsening from –19% in May.
The outlook for July remains subdued, with seasonal expectations at –38%.
Wholesale activity also contracted, though at a slightly slower pace: annual volumes declined by –34%, improving from –48% in May. Wholesalers anticipate further reductions next month at –39%.
Meanwhile, motor trade volumes fell by –37% in June, easing from –65% in May, with a projected decline of –34% in July.
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By GlobalDataAll segments taken together—retail, wholesale and motor trade—showed a total distribution sales balance of –39%, little changed from –43% the previous month, and forecast to remain weak at –42% in July.
Online retail maintains modest growth amid wider slump
Amid the broader downturn, online retail remained one of the few bright spots. E‑commerce volumes in June rose by 6% year‑on‑year, although this was well down from May’s 37% increase. Retailers forecast online sales to grow by approximately 8% in July.
Order volumes fall, stock levels remain high
Retailers placed fewer orders with suppliers in June, with the strongest drop since December 2023 at –51%, up from –41% in May. Expectations for July remain similarly weak at –53%.
Despite reduced demand, retailers are carrying excess inventory: stock volumes relative to expected demand reached +26%, compared with the long‑run average of +17%, and are expected to hold at +27% in July.
Policy challenges and economic outlook
CBI principal economist Martin Sartorius noted that consumer caution is dampening retail and wholesale activity, emphasising that “underlying activity remains subdued in the distribution sector.”
He added that the government’s Industrial Strategy is timely, but cautioned that investment in skills and regulatory relief must extend beyond currently prioritised sectors to support both local and national prosperity.
Official data shows broader weak sentiment
Official statistics from the Office for National Statistics (ONS) reinforce the picture:
overall retail sales volumes, as measured by the Monthly Business Survey, fell by 2.7% in May—the widest monthly drop since December 2023. On an annual basis, they were 1.3% lower than a year earlier.
The consumer spending outlook
Persistent inflation, cost‑of‑living pressures and reduced discretionary spending continue to weigh on household budgets. The CBI’s survey, based on responses from around 150 companies, acts as a leading indicator of consumer demand.
As consumers remain cautious and retailers carry higher stock levels, the distribution sector faces ongoing headwinds.
Should these conditions persist, further policy interventions may be required to stimulate consumer confidence and support long‑term retail resilience.
