The downturn in British retail sales extended into its 11th consecutive month in August, according to the latest survey from the Confederation of British Industry (CBI). At the same time, retailers reported the sharpest rise in prices since late 2023.
The CBI’s monthly gauge of year-on-year retail sales came in at -32, broadly unchanged from July’s -34 but an improvement on June’s low of -46. Looking ahead, expectations for September improved, with the balance rising to -16.
“Weak demand and higher labour costs continue to put pressure on margins, dampening sentiment across the retail and wider distribution sector,” said Martin Sartorius, Principal Cconomist at the CBI. “This downbeat outlook is reflected in firms’ plans to scale back investment and hiring.”
Many employers say they are struggling to absorb the combined impact of a steep increase in the National Minimum Wage alongside higher employment taxes, introduced by Chancellor Rachel Reeves in April.
The CBI’s measure of average selling prices in the 12 months to August jumped to +65 – the fastest rate of increase since November 2023. This compares with a reading of -35 as recently as May. However, price growth is expected to ease slightly in September, with the balance dropping to +43.
The findings are based on survey responses from 56 retailers and 98 wholesalers, collected between 28 July and 14 August.
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