Summer sun shines on retailers but outlook is weaker, says CBI


Retail sales growth expanded at a healthy pace in the year to July, albeit at a slightly slower rate than in the previous month, according to the latest monthly CBI Distributive Trades Survey.

The survey of 111 firms, of which 50 were retailers, showed that sales also stayed above average for the time of year. But orders placed on suppliers fell, disappointing expectations of continued growth.

The outlook for the coming month is less upbeat, with retailers expecting sales volumes and orders to flatten out.

Growth in online sales also slowed somewhat in the year to July, to a pace around the long-run average. Sales growth is expected to ease slightly further in the year to August.

Within the retail sector, the majority of sub-sectors saw decent sales volumes growth. Footwear & leather, recreational goods and department stores performed well, but clothing and furniture & carpets saw sales fall.

Meanwhile, wholesalers reported strong growth in sales volumes, with a slight easing expected in the year to August. Motor traders saw a modest pickup in sales volume growth, and expect a further jump in the year to August.

Alpesh Paleja, CBI Principal Economist, said:

“While the heatwave has boosted retail sales in recent months, we may be seeing some early signs of a cooling off, with orders falling in the year to July and retailers expecting no growth in sales next month.

“Indeed, the long-term challenges facing the retail sector are significant. Continually subdued real wage growth means that households are still feeling the pinch, and retailers are still grappling with deeper structural issues, such as digital disruption.”

Key findings


  • 32% of retailers said that sales volumes were up in July on a year ago, whilst 12% said they were down, giving a balance of +20%. This was roughly in line with expectations (+18%)
  • 14% of respondents expect sales volumes to increase next month, whilst 14% expect a decrease, giving a balance of 0%
  • 13% of retailers placed more orders with suppliers than they did a year ago, whilst 22% placed fewer orders, giving a rounded balance of -8%. This was below expectations (+11%)
  • 30% of retailers reported that their volume of sales for the time of year were good, whilst 18% said they were poor, giving a balance of +12%
  • Internet sales volumes continued to expand at a healthy pace (+44) albeit with growth slower than in the year to June (+52%). Internet sales growth is expected to slow further in the year to August (+38)
  • Sales volumes expanded in the majority of retail sub-sectors. Footwear & leather (70%), recreational goods (+67%), and non-specialised (i.e. department stores) (+50%) performed strongly. Meanwhile, sales volumes decreased in clothing (-15%) and furniture & carpets (-43%).


  • 54% of wholesalers reported sales volumes to be up on last year, and 21% said they were down, giving a rounded balance of +32%. Volumes are expected to grow at a slightly slower pace next month (+26%)
  • Growth in the volume of orders placed upon suppliers accelerated (+26%, from +11% in June), and is expected to grow at a similar pace in the year to August (+27%).

Motor traders:

  • 45% of motor traders reported sales volumes were up on a year ago, whilst 24% said they were down, giving a balance of +21%. This was below expectations (+33%). Volumes are expected to increase sharply next month (+61%).

25 July 2018