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UK retail sales fall at fastest pace in 4 years

Jul 29, 2016 United Kingdom
UK retail sales fall at fastest pace in 4 years
According to the latest monthly Distributive Trades Survey from the Confederation of British Industry (CBI) retail sales in July had the sharpest decrease in more than 4 years
The survey conducted by CBI showed the decline registered in sales volume in July was the most intense since January 2012, with weaker consumer confidence, a reflection of the recent EU referendum. Companies expect sales volumes to continue to decline at a broadly similar pace.

According to the same source, within retail, sales by grocers, and furniture and carpets stores were the main drivers of the drop in overall volumes. But some sectors bucked the trend, with non-specialised department stores and retailers of footwear and leather goods reporting higher volumes.

24% of retailers said that sales volumes were up in July compared with a year earlier, while 38% said they were down, giving a rounded balance of -14%. This followed modest growth in the previous month (+4%). The same source indicated that sales growth is set to fall further in the year to August (-12%).

A number of sub-sectors saw reduced sales volumes: particularly grocers (-30%) and the furniture and carpets sector (-90%). But sales increased for non-specialised goods (+52%) and footwear and leather (+44%).

Rain Newton-Smith, CBI Chief Economist, said: “While conditions in the retail sector have weakened, we should be careful about reading too much too soon, as consumers were likely to err on the side of caution in the immediate period following a vote to leave the EU. Current low levels of inflation and high overall employment should support consumer spending in the near term, although the impact of lower sterling is likely to feed through to higher inflation over time.”

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