UK Retail Sales Worse than Expected: CBI

The CBI retail sales balance fell to -55 in September 2026 from -48 in August, the lowest in five months and missing market forecasts of -50. Retailers reported a sharper annual decline in sales, with sales judged increasingly poor for the time of year as weak consumer sentiment weighed on demand. Online retail sales dropped to -68 from -43, the fastest decline since October 2023. Retail orders placed with suppliers also plunged to -62 from -29, marking the steepest fall since the survey began in 1983, suggesting retailers are responding to weaker demand by cutting purchases. Total distribution sales, including wholesale and motor trades, declined faster, with the balance falling to -36 from -27. Looking ahead, retailers expect sales to fall at a slower but still rapid pace in October, while online sales and supplier orders are forecast to remain deeply negative. Stock levels relative to expected sales remained below their long-run average.

The CBI’s headline sales balance fell to -48 in August 2026 from -26 in July, well below market expectations of -24. Retailers reported significantly lower sales volumes, while the broader distribution sector also faced subdued trading conditions. The deterioration weighed on hiring and investment plans, although retailers expect some improvement in September, with sales expectations rising to -22, the strongest outlook since March. Sales for the time of year also declined, reaching -26 from -18 in July. The CBI’s quarterly business situation balance weakened to -29 from -15 in May, highlighting continued pressure on the sector. However, investment intentions improved considerably to -16 from -52 in May, their strongest level since February 2024. Employment trends also showed some resilience, with retailers cutting jobs at the slowest pace since November 2025.

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.