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Outlook bleak for August sales

Sales volumes fell sharply in July with summer Sales failing to lure shoppers back to the high street and the outlook for August is bleak, according to the latest CBI Distributive Trades Survey.

Some 61% of respondents to the CBI survey reported that sales in the first half of July were lower than a year ago. Just 25% of respondents said sales had increased. The resulting balance of -36% is the weakest since the survey began in 1983. The CBI expects the balance for sales volumes to be around -32% for August.

Clothing retailers reported a particularly poor month. Supermarkets and footwear and leather retailers were the only sectors to report positive year-on-year growth.

The three-month moving average of sales volumes, which smoothes out monthly volatility, continued on the downward trend with a -20% balance.

Suppliers said that weak retail sales had affected their orders with 37% reporting a year-on-year fall in volumes.

Andy Clarke, CBI Distributive Trades Panel chairman and retail director of Asda said: "It is turning out to be a very grim summer for many retailers. Pressure from higher fuel and food prices is prompting many people to rein in their spending, proving that value retailing has never been more important."

He added: "The retail sector will have to focus more than ever on providing good value to customers if they want to keep the sun shining this summer."

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