LONDON: Sales volumes in the wholesale sector grew strongly beating expectations of little change, according to the latest CBI Distributive Trades Survey.
The survey predicts sales to grow again in July but the trend for retail sales is down. The volume of sales on the high street fell again in June, compared with a year ago. But the decline was slower than expected and than last month and retailers are hopeful that sales will pick up in July, partly because of the impact of the World Cup.
More than a third of retailers surveyed (34%) reported a rise in the volume of sales during the first two weeks of June, compared to the same time a year ago, while 39% reported a fall. The resulting balance of -5% is better than had been predicted (-15%), and an improvement on May's unexpectedly weak balance of -18%.
The three-month moving average of sales volumes was marginally negative (-3%), after staying positive for seven months in a row, and a net 11% of retailers described sales as poor for the time of year, similar to the results for April and May.
The decline in sales was led by footwear & leather, which saw a sharp fall in sales after eleven months of solid growth, followed by hardware, china and DIY.
Ian McCafferty, CBI chief economic adviser, said: "Retailers are hopeful that sales will strengthen next month. As the survey pre-dates the emergency Budget, news that the feared rise in VAT will not take effect until next January may well also encourage some advance spending over the second half of the year."
