British retail sales fell at an unchanged pace in June, though orders placed with suppliers picked up, a survey by the Confederation of British Industry showed on Wednesday. The CBI's distributive trades survey sales balance remained unchanged on the month at -17, in line with analysts' average forecast and well below its long-term average of +18, suggesting April's move into positive territory was a blip caused by good weather over the Easter break.
"Consumers are modestly more prepared to spend compared to earlier this year, but are still pretty reluctant to splash out," said Howard Archer, chief UK economist at IHS Global Insight.
For July, retailers expected a balance of -21, slightly more pessimistic than the -20 they had expected for June.
"The upside for consumer spending is limited by a number of factors. These include elevated and still markedly rising unemployment, much reduced earnings growth and heightened debt levels," said Archer. The volume of orders placed with suppliers was the highest since March 2008, while levels of excess stocks was at its lowest since June 2007.
Furniture and carpet retailers reported sales grew for the first time since January 2008, though sales of durable household goods fell, giving mixed evidence of households' readiness to spend on big-ticket items. "June's weak sales figures show that business on the high street isn't getting any easier. The one consolation for retailers is that it isn't getting any worse," said Andy Clarke, chief operating officer of Wal-Mart's <WMT.N> British supermarket chain Asda and chairman of the CBI survey panel.
"It is too early to foresee a sustained pick-up in retailers' fortunes over the coming months."
The CBI also said car sales were broadly flat with a year ago, with a balance of -1, the highest since May 2008, probably reflecting a boost from the government's scrappage incentives for old cars.
The government has said the scheme, modelled on a German plan to boost car sales, has led to an extra 60,000 orders for new cars, causing carmakers to rehire workers laid off at the turn of the year.
