The CBI Distributive Trades Survey (DTS), covering the first half of June, showed that 37 per cent of retailers reported sales volumes up on last year, compared with 20 per cent that reported declines. The balance of 17 per cent between the two is the lowest since November.
Clothing sales fell 52 per cent in June, suffering from poor weather, at an annual rate recorded only once before in the survey's 24-year history, in July 2005.
Household items also fared badly. Sales of durable goods - such as TVs and fridges - fell 21 per cent year on year for the second month running, having recorded strong rates of growth since January. Hardware, china and DIY sales also slowed, from a balance of 62 per cent in May to 36 per cent in June. Retailers said they expect sales in July to increase at a similar rate to June.
Chairman of the CBI's Distributive Trades Panel and Asda executive director John Longworth said: 'This survey shows consumers are reining in their spending in response to higher borrowing costs. A slower housing market is making its impact felt, in particular on sales of consumer durables and more expensive household items. But shoppers are also curbing their spending on everyday things, such as groceries and a month of mixed weather did not inspire people to buy new summer clothes. Because shoppers' pockets are going to be that bit less deep, retailers will be working harder to attract and keep custom in an even more competitive marketplace.'