By Daniel Hunter

Retailers expect sales to pick up next month, after stagnant volumes in the twelve months to June, according to the CBI’s latest monthly Distributive Trades Survey.

The survey of 115 firms revealed that flat retail sales volumes in the year to June disappointed retailers’ hopes of modest growth. But it was better than the year-on-year fall in sales seen last month, which was the first decline since April 2012.

Orders were broadly flat on a year ago, although they surpassed expectations of a third consecutive fall.

Sales volumes were a fair way below average for the time of year in June, despite expectations they would be broadly in line with seasonal norms. Stock adequacy picked up on last month, in line with its long-run average.

The outlook is a little brighter for next month, when retailers expect sales volumes to increase.

Barry Williams, Asda Chief Merchandising Officer for Food, and Chair of the CBI Distributive Trades Survey Panel, said: “Despite an improvement in British weather conditions, retailers will be disappointed they didn’t see the return to growth they expected in June — but the forecast is looking good for July when it’s hoped retail sales will return to form.

“However, with the cost of living still much higher than pay growth, family spending power is likely to remain fragile through the summer.”

The survey was conducted between 29th May and 13th June.

Key findings:

• 25% of firms reported that sales volumes were up on a year earlier, and 24% said they were down, giving a balance of +1%. This was below expectations of +10%
• 10% reported good sales volumes for the time of year, and 26% poor. The resulting rounded balance of -17% was weaker than expected (-3%)
• 26% placed more orders with suppliers than they did a year ago, and 26% fewer, resulting in a rounded balance of 1%, which nonetheless beat expectations of a fall (-15%)
• Grocers’ sales rose modestly (+9%) after stagnating in May (-3%)
• Non-specialised (such as department stores), footwear & leather and non-store sales all recorded firm growth in the year to June (+48%, +38% and +58% respectively)
• But this was offset by falling sales in other sectors including durable household goods (-50%), specialist food and drink (-43%), and cultural goods including newspaper, stationary, books, CDs and DVDs (-67%)
• Sales volumes are expected to pick up in the year to July, with 32% of firms expecting an increase versus 19% predicting a decrease, resulting in a balance of +13%.

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