U.K. retail-sales growth slowed more than stores had forecast this month after the additional public holiday for the queen’s Diamond Jubilee boosted sales in June, the Confederation of British Industry said.
A gauge measuring the annual change in sales fell to 11, the lowest since April, from 42 in June, the London-based business lobby said in a monthly survey today. That’s below the reading of 32 that retailers had predicted. A measure of expected sales for August was at 3, indicating they expect sales growth to slow further, the CBI said.
Britain’s economy shrank 0.7 percent in the second quarter, the most in more than three years, according to data last week. With the euro-area debt crisis damping consumer confidence, that’s dimming prospects for a recovery even as the Bank of England pumps money into the economy and tries to encourage lending to companies and households.
“The unprecedented poor weather for the time of year did not help, but retailers also expect conditions to remain tough during August,” said Judith McKenna, chief operating officer of Wal-Mart Stores Inc.’s Asda unit and head of the CBI’s distributive trades panel. “With consumer confidence weak and wage growth remaining sluggish, the longer-term outlook for retailers remains challenging.”
The CBI report also showed that a gauge of orders with suppliers fell to 5 in July from 23 in June and the volume of stocks in relation to demand rose to 21 from 11. The CBI said sales in July were below average for the time of year.
In the three months through June, the index of annual sales growth jumped to 25 from 19. The CBI surveyed 72 retailers between June 26 and July 17.