The Confederation of British Industry (CBI) reported on Tuesday its latest survey of retailers showed retail sales volume balance stood at -6 in the year to August, down from +4 in July, which pointed to a slight fall in retail sales after broadly flat sales in the previous month. The decline was broad-based across sectors.

Economist had forecast the reading to increase to +8.

Moreover, retail sales volumes are expected to fall at a faster rate in the year to September (-17).

The report also revealed that orders placed on suppliers fell for the sixteenth consecutive month (-27 in August, down from -14 in July) and are expected to drop at a similar pace next month (-26). Meanwhile, stock levels in relation to expected sales eased to their lowest level since March (+19 in August, down from +29 in July).

In other survey's results, employment in the retail sector dropped at the sharpest pace since February 2009 in the year to August (-45, down from -20 in May) and an even faster decline is anticipated in the quarter ahead (-52). Investment intentions for the year ahead remained negative, but to a lesser extent than in May (-32, down from -55).

“Indeed, the latest survey shows that trading conditions for the retail sector remain tough, even against the backdrop of business slowly returning. Firms will be wary of deteriorating household incomes and the risk of further local lockdowns potentially hitting them in the pocket for a second time,” noted Alpesh Paleja, CBI Lead Economist. “As a result, further support may well be needed for the retail sector if demand continues to disappoint. Extending business rates relief will go a long way towards alleviating pressure on retailers’ cash flow.”