The CBI distributive trades survey's July sales balance fell to +11 from an 18-month high of +42 in June. The survey blamed rainy weather for damaging the amount shoppers were spending.
"Retailers reported an annual rise in sales and orders for the third month in a row, but the increase was far slower than firms had anticipated," said Judith McKenna, ASDA Chief Operating Officer and chairwoman of the DTS panel.
"The unprecedented poor weather for the time of year did not help, but retailers also expect conditions to remain tough during August. With consumer confidence weak and wage growth remaining sluggish, the longer-term outlook for retailers remains challenging."
Last month’s strong balance from the CBI was not reflected in the official data from the Office for National Statistics, which showed just 0.1% growth in sales volumes in June compared to the previous month.
Questions have also been raised today over the economic benefit likely to be felt in London from the Olympics, with theatre owners and retailers telling the Financial Times that the capital has turned in a “ghost town” as visitors stay away.
The chief executive of Nimax Theatres told the FT that she was expecting a 30% drop in ticket sales across her six London theatres, and the Association of Leading Visitor Attractions reported a fall of 30-35% in attendance over the past two weeks, compared with last year.
In total, the government hopes the Olympics and legacy projects will add £13bn to the UK economy over the next ten years.