High street sales fell in early June despite shoppers splashing out on food and new televisions for the World Cup, the CBI business group said today.
The CBI's distributive trades survey showed a 5% balance of retailers reporting lower sales volumes than a year ago in the two weeks to June 9 - although this improved on May's 18% decline.
Hardware, DIY and footwear sales were worst hit although the grocers and retailers of durable household goods enjoyed "solid growth", the survey showed.
Retailers are optimistic of a pick-up in sales in July - again aided by South Africa's football extravaganza - but the CBI's survey revealed a "mixed performance" across the sector, according to chief economic adviser Ian McCafferty.
And the organisation's longer-term indicator which averages out sales volumes over the last three months turned negative for the first time in seven months.
The survey was carried out before Chancellor George Osborne announced a VAT hike to 20% next January, although retailers may gain some benefit as shoppers make earlier purchases to beat the increase, the CBI said.
"News that the feared rise in VAT will not take effect until next January may well also encourage some advance spending over the second half of the year," Mr McCafferty added.
The latest high street snapshot comes after official figures for May last week showed a much stronger than expected 0.6% rise in retail volumes over the past month.
Capital Economics UK economist Vicky Redwood said the CBI survey showed the high street "had lost a bit of momentum" - with yesterday's Budget squeeze set to add to the pressure.
She warned: "The overall outlook for consumer spending still looks pretty weak. Rising taxes, frozen or falling benefit payments and falls in the public sector pay bill will all squeeze household incomes severely."Reuse content