GB: CBI Distributive Trades

Highlights

UK retail conditions improved modestly in July, although the sector remained firmly in contraction. The retail sales balance rose from minus 54 percent in June to minus 26 percent, indicating that the downturn lost momentum rather than giving way to recovery. Retailers’ expectations of another minus 26 percent decline in August, alongside a worsening seasonal assessment of minus 29 percent, suggest that weak consumer confidence and elevated operating costs will continue to constrain demand.

The collapse in online sales to minus 47 percent is particularly concerning, as it indicates that weakness extends beyond physical high streets. Faster contractions in supplier orders also reveal cautious inventory planning and subdued expectations. Nevertheless, stock levels remained close to their long-run average, reducing the immediate risk of excessive inventories.

Conditions across the wider distribution sector were more encouraging. Wholesale volumes stabilised after 25 consecutive months of decline, while motor trade sales rebounded strongly to 57 percent. In summary, the findings suggest an uneven and fragile stabilization as retail remains under pressure, but improvements in wholesale and motor trades offer tentative evidence that the broader distribution downturn may be approaching a turning point.

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