Yahoo Finance CBI: Retail sales plummeting at fastest pace since 2008
Retail sales in the UK declined in August at their fastest pace since December 2008, according to a closely watched survey from the Confederation of British Industry (CBI).
Only 10% of retailers who responded to the survey reported an increase in sales, while 58% said sales had fallen — the second-weakest reading since the business group introduced the survey in 1983.
Despite that, the CBI said sales were only slightly below average for the time of year.
The survey data also comes on the back of much stronger-than-expected official figures from the Office for National Statistics (ONS).
Retail sales in the UK climbed by 0.2% in July compared to June, even after retail industry bodies had warned of a dire month for the sector.
READ MORE: Stronger retail sales in July keep UK recession fears at bay
But even then, retailers expect conditions to worsen at their sharpest pace since the middle of the financial crisis, according to the CBI survey.
Roughly 27% of retailers expect a deterioration in the retail business situation in the next three months, while just 2% think it will improve.
Meanwhile, 67% of respondents reported that they had placed fewer orders with suppliers in August, while only 10% said they had increased orders.
“Sentiment is crumbling among retailers, and unexpectedly weak sales have led to a large overhang of stocks. With investment intentions for the year ahead and employment down, retailers expect a chilly few months,” according to Anna Leach, an economist at the CBI.
“It is unsurprising that business confidence has deteriorated sharply, with a potential no-deal Brexit on the horizon,” she said, noting that retailers were also suffering from an “outdated” business rates system and the apprenticeship levy.
It remains to be seen whether the survey data from the CBI will be borne out in the official figures. Analysts had predicted the sector would see a 0.2% contraction in sales in July, when sales actually grew.
The boost was mainly driven by growth in online and non-store retailing, which surged by 6.9% in July, and an unexpected turnaround for department stores, where sales grew for the first time since early 2019.
