https://www.cmegroup.com/content/dam/cmegroup/images/common/default/article-940x600.jpg
GB: CBI Distributive Trades
| Actual | Previous | |
| Sales Balance | -46% | -68% |
Highlights
The latest distributive trades survey suggests the UK retail sector is still struggling with weak consumer demand at minus 46 in May, from minus 68 in April. Retail price inflation slowed to its weakest pace since February 2025, reflecting subdued spending power and retailers' limited ability to pass higher costs on to consumers. Although annual retail sales volumes continued to decline, the pace of contraction eased from April's sharp downturn, suggesting that demand conditions may be bottoming out rather than deteriorating further.
However, underlying sentiment remains fragile. Retailers have reported negative business expectations for nearly two years and continue to anticipate a worsening trading environment. This pessimism is translating into reduced investment intentions and further workforce reductions, with planned capital expenditure cuts reaching their most severe level since early 2025. Such caution risks constraining productivity and future growth across the sector.
The outlook is further complicated by emerging inflationary pressures linked to geopolitical tensions in the Middle East, which are beginning to feed into wholesale prices. While temporary VAT relief on family activities may provide some support to household spending, structural challenges persist. Encouragingly, online sales rebounded in May, but this recovery appears fragile. Overall, the survey suggests that the retail sector remains caught between weakening demand and rising cost pressures, leaving the recovery outlook uncertain and highly dependent on broader economic conditions.
Definition
The Confederation of British Industry (CBI) produces a monthly survey (and a more detailed quarterly report) analysing the performance of the UK retail, wholesale and motor trade sector. Volume sales, orders on suppliers, sales for the time of year and stocks are all covered and the quarterly survey also covers imports, selling prices, numbers employed, investment and business situation. Financial markets tend to concentrate on the CBI's annual sales growth measure as a leading indicator of the official retail sales report.
Description
This survey is a leading indicator of consumer spending because retailer and wholesaler sales are directly influenced by consumer buying levels. The monthly update provides a vital update on volume of sales, orders and stocks. Like the industrial survey, it carries significant weight in the formulation of economic policy at the Bank of England and within government as a highly respected barometer of high street trade. It is considered to be an advance indicator of retail sales although it is not well correlated with the official data on a monthly basis.