An index of U.K. retail sales dropped to its lowest level in four months in August and confidence about the outlook for the next quarter weakened, the Confederation of British Industry said.
The gauge of annual sales growth declined to minus 3, the lowest since April, from 11 in July, the London-based business lobby said in a report today. A quarterly measure of retailers’ expectations for trading conditions over the next three months fell 20 points to minus 17, the weakest since February 2009.
Retailers have tried to lure shoppers by cutting prices, and the CBI said that retail-price inflation slowed over the past quarter to its weakest pace in almost three years. Still, any recovery in consumer spending may be kept in check as the economy struggles to recover from a recession and government budget cuts undermine confidence.
Judith McKenna, chief operating officer of Wal-Mart Stores Inc.’s Asda unit and head of the CBI’s distributive trades panel, said that while the London Olympics this month “created a mood of celebration,” today’s data indicate “this positivity did not extend to the high street.”
Recreational goods and department stores reported the sharpest annual declines in sales, according to the report. The CBI said retailers expect the business situation to “deteriorate significantly over the next three months.”
A quarterly index showed the rate of selling-price inflation dropped to 31 this month, its lowest since November 2009, from 54 in May. A measure of retailers’ investment intentions fell to minus 13 from minus 8.
Within the monthly survey, the CBI said sales were “well below” their average for the time of year in August. The measure of orders placed on suppliers decreased to minus 11 this month from 5 in July and the volume of stocks declined to 12 from 21.
The survey of 76 retailers was conducted between July 26 and Aug. 15.