British retail sales fell in August at the fastest rate since March 2021 and most stores are expecting another tough month ahead, an industry survey showed.
The Confederation of British Industry's monthly balance of retail sales, which compares volumes with a year ago, fell to -44 in August from -25 in July. Expectations for the month ahead improved to -21 from -32, but were still deeply negative.
"Against a backdrop of rising interest rates and weak demand, retailers foresee cuts to investment over the next year, while employment is expected to fall again next month," CBI economist Martin Sartorius said, referring to quarterly data published in the survey this month.
The quarterly business situation balance - a gauge of sentiment among retailers - fell to -14 from +6 in May, the lowest reading this year.
Slow Sales Growth In UK Supermarkets
The CBI data echoed industry data earlier this week that showed sales growth at British supermarkets slowed in August, reflecting lower inflation as well as a hit to demand from unsettled, unseasonably wet weather.
Market researcher NIQ said supermarket sales on a value basis grew 7.2% in the four weeks to 12 August – the lowest growth since January and down from 8.9% in its July data set.
NIQ said supermarkets, in a bid to encourage demand, edged up spending on promotional activity to 23% of all fast moving consumer goods (FMCG) sales versus 22.5% in the previous month, noting targeted price cuts and loyalty card offers.
The researcher said market leader Tesco saw sales increase 9.7% over the 12 weeks to 12 August, with its market share nudging up to 26.8%.