UK Retail Sales Fall The Least Since January

The CBI retail sales balance improved to -26 in July 2026 from -54 in June, well above market expectations of -45, signaling the smallest decline in UK retail sales in six months. Although sales remained lower than a year earlier, retailers said the pace of the downturn had eased, while sales for the time of year were judged to be below seasonal norms by the smallest margin since February. The CBI said the sector continues to face headwinds from weak consumer confidence and elevated cost pressures, leaving the outlook subdued. Looking ahead, retailers' expectations for August improved to -26 from -45, the strongest reading since March. The CBI urged Prime Minister Andy Burnham's government to support high-street retailers through lower property taxes, address rising labour costs, and preserve hiring flexibility as employment reforms are finalized. Meanwhile, wholesalers reported broadly unchanged sales volumes for the first time in more than two years.

The CBI retail sales balance plummeted to -54 in June 2026 from -46 in May, missing market forecasts of -41. Retailers reported a downcast start to the summer as depressed consumer sentiment and climbing cost pressures caused sales to fall significantly below seasonal norms. The annual sales decline was reflected across the broader distribution sector, with wholesale volumes also contracting by 20%. While online sales remained flat at 0% after a previous 11% gain, internet sales are projected to rebound strongly next month by 37%. However, overall retail, wholesale, and total distribution sales are expected to face ongoing contraction into July. CBI Lead Economist Martin Sartorius emphasized that businesses require clarity and structural reforms, particularly regarding business rates and energy costs, to stimulate economic growth as the government transitions to a new Prime Minister.

The CBI retail sales balance improved to -46 in May 2026 from -68 in April, beating market expectations of -60, with retailers expecting a further moderation to -36 next month. Sales remained below seasonal norms and demand stayed weak, while retail sentiment remained negative for a second straight year despite a slower deterioration than in previous quarters. Retail selling price inflation eased to its slowest pace since February 2025, with the balance falling to 28 from 41. Retailers also signalled further cuts to investment and hiring plans, with capital expenditure expectations falling to their weakest level since February 2025. Employment in the sector continued to decline, although at a slower pace. CBI economist Charlotte Dendy said the slowdown in price growth highlights weak consumer demand and warned that firms continue to face pressure from high operating costs, while calling for business rates reform, lower energy costs and reduced regulatory burdens to support the sector.