British retailers experienced a third consecutive month of declining sales in August, with expectations of another drop in September.
This has led to a reduction in hiring and investment plans, according to the Confederation of British Industry (CBI) on Tuesday.
The CBI's monthly retail sales balance registered at -27 in August, an improvement over July's -43 but still the second-lowest since April.
Retailers are bracing for continued challenges in September, with the sales expectations index at -17.
"Retail sales volumes remained disappointing through August, with declines also observed in the wholesale and motor trade sectors," noted Martin Sartorius, CBI's principal economist.
Sartorius added, "Retailers are showing increased caution in their investment and hiring plans, likely due to ongoing concerns about weak demand."
The retail sector has been significantly impacted by reduced household spending power, compounded by poor weather in recent months.
A quarterly version of the survey highlighted a drop in investment intentions, which fell to -35 in August from -25 in May. Additionally, the expected employment index decreased to -28 from -18.
Retailers also anticipate a slowdown in price increases, with the index for expected selling prices easing to +15 from +30 in May.
In related news, separate data released on Tuesday indicated that shop prices fell annually in August for the first time since October 2021.
Official retail sales data from earlier this month showed a slight increase in British retail sales in July, partially driven by the men's Euros soccer championship and warmer weather.
The CBI's survey was conducted with responses from 50 retail chains between July 29 and August 14. Photo by Unisouth, Wikimedia commons.