UK retailers see sharp improvement in July sales decline despite ongoing cost pressures

Monday 27 July 2026 - 10:35

By: Sahili Aya

UK retailers see sharp improvement in July sales decline despite ongoing cost pressures

British retailers recorded their weakest sales decline in six months during July, suggesting a modest improvement in consumer activity, although businesses remain concerned about persistent financial pressures, according to the Confederation of British Industry (CBI).

The CBI's latest survey indicated that retail performance improved significantly compared with the previous month, but the sector continues to face challenges linked to rising operating costs and a cautious consumer environment.

Retail downturn slows in July

The CBI's headline measure of retail activity compared with the previous year improved to -26 in July, up from -54 in June.

The reading represents the strongest result since January, indicating that the pace of decline has eased considerably.

Retailers also reported that sales levels were closer to seasonal expectations, with the gap between actual and typical July performance narrowing to its smallest level since February.

Businesses remain under pressure

Despite the improvement, retailers maintained a cautious outlook as cost pressures continue to weigh on operations.

Companies across the sector have been dealing with higher expenses, including wages, energy costs and supply chain challenges, limiting their ability to fully benefit from any recovery in consumer demand.

The survey suggests that while conditions are stabilizing, many retailers remain hesitant about the strength and durability of the improvement.

Consumer outlook remains key

The retail sector is closely watched as an indicator of wider economic health in the United Kingdom, where household spending plays a major role in overall growth.

A sustained recovery in consumer confidence could provide support for businesses in the coming months, but retailers will continue monitoring inflation trends, household budgets and broader economic conditions.

The latest CBI data offers a more positive signal for Britain's retail industry, while highlighting that significant challenges remain before the sector returns to stronger growth.