UK retail sales fell at a sharper pace in June as weak consumer confidence and rising cost pressures continued to weigh on spending.

The CBI’s latest Distributive Trades Survey found that retail sales volumes dropped to a weighted balance of -54 in the year to June, down from -46 in May.

Sales were also judged to be below seasonal norms to the greatest extent in more than two years, with the balance falling to -40 from -35 last month.

Retailers expect the downturn to continue into July, although at a slightly slower pace, with year-on-year sales forecast to come in at -45.

CBI lead economist Martin Sartorius said retailers had faced a “gloomy start to the summer” as shoppers continued to rein in spending amid “depressed consumer sentiment and rising cost pressures”.

The pressure was not limited to retailers. Wholesale sales volumes fell by -20 in the year to June, while total distribution sales declined by -33, broadly in line with May’s -35 reading.

Online sales also lost momentum, with volumes flat in June after rising 11% in May. However, retailers expect internet sales to grow strongly next month, with a forecast balance of +37.

Orders placed with suppliers continued to decline, although at a slower pace than in May, falling to -26 from -39. Stock volumes were broadly in line with the long-run average.

Sartorius said businesses needed greater clarity and stability as confidence remained fragile, urging the government to focus on the cost of doing business.

He said priorities for retailers and wholesalers included business rates reform, action on energy costs and ensuring employment reforms do not reduce labour market flexibility.

The survey adds to signs of a wider slowdown in the UK economy, following weaker business survey data and a separate CBI report showing manufacturing orders deteriorated at their fastest pace since September 2020.

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