UK retail sales decline sharply in August

The UK retail sector experienced a significant decline in sales volumes during August, according to the latest CBI Distributive Trades Survey. The headline sales volume balance fell to -48, a sharp drop from -26 in July, marking a two-month low.

Retailers reported that sales were well below normal seasonal levels. This downturn has negatively impacted business sentiment, weighing on investment and hiring plans across the retail and broader distribution sectors. While retail headcount declined in August, the pace of job losses has slowed compared to earlier in the year.

Despite the current contraction, there are signs of cautious optimism for the coming month. Firms expect sales expectations to improve to -22 in September, the strongest forecast since March. Additionally, while retailers still plan to reduce capital expenditure over the next 12 months, the intended cutbacks are the smallest seen since early 2024.