Retail sales struggle amid subdued demand and economic uncertainty - CBI Distributive Trades Survey - July 2025

Retailers reported that sales volumes fell at a firm rate in the year to July, according to the latest CBI Distributive Trades Survey. The sales downturn has now stretched into a tenth consecutive month, underscoring the persistently challenging trading conditions facing the sector.

Annual sales volumes are expected to decline at a broadly similar pace next month.

Key findings included:

• Retail sales volumes contracted at a strong rate in the year to July, but the pace of decline slowed from June (weighted balance of -34% from -46% in June). Retailers expect sales to fall at a broadly similar pace next month (-31%).

• Sales for the time of year were judged to be “poor” in July, but to a considerably lesser extent than last month (-10% from -37% in June). However, next month’s sales are expected to fall short of seasonal norms to a greater degree (-36%).

• Online retail sales volumes grew marginally in the year to July, marking the third month in a row of expansion (+4% from +6% in June). Internet sales are expected to rise at the same pace in August (+4%).

• Wholesale sales volumes fell in the year to July at a similarly firm rate to last month (-32% from -34% from June) and are expected to decline at a comparable pace in August (-30%).
• Total distribution sales volumes (including retail, wholesale, and motor trades) fell at the same fast rate as last month in the year to July (-39%) and are expected to contract at a slightly slower pace in August (-34%).

Martin Sartorius, Principal Economist, CBI, said:

“Retail annual sales volumes continued to fall in July, although the pace of decline moderated from June’s sharp drop. Firms reported that elevated price pressures – driven by rising labour costs – and economic uncertainty continue to weigh on household demand, which has contributed to sales volumes falling since October 2024. These trends of weak demand and uncertainty were mirrored across the wider distribution sector, with wholesale and motor trades also seeing declining sales. 

“With long-term strategic ambitions outlined, the government must now seek to build shorter term confidence in its growth mission. It can do this by collaborating with business to deliver an Autumn Budget that acknowledges the burden firms are facing and sets clear policy delivery targets. This includes providing clarity on how the government will deliver its action plan to tackle regulatory barriers to growth, position businesses to invest in the people they need through a flexible Growth and Skills Levy, and find an appropriate landing zone for the Employment Rights Bill.”

In addition, data from the survey showed:

• Retail orders placed upon suppliers declined at a more moderate pace in the year to July (-21% from -51% in June). Retailers expect to reduce orders at a slightly slower rate in August (-16%).

• Retail stock volumes in relation to expected demand dipped below the long-run average in July (+12% from +26% in June; long-run average +17%) and are set to remain at a broadly similar position next month (+10%). 

• Motor trade sales volumes contracted in the year to July at the sharpest rate since June 2020 (-77% from -37% in June). Motor traders anticipate another fast sales decline next month (-57%).