High street retailers reported a third consecutive month of rising year-on-year sales and orders in July, the Confederation of British Industry (CBI) said today (30 July), but it said the rate of UK retail sales growth was slower than expected.

56% of clothing retailers and 42% of footwear retailers reported that sales were higher than a year ago, but growth slowed compared to last month.

Overall, the CBI's latest monthly Distributive Trades Survey, covering the first two weeks in July, found that 44% of retailers said their sales volumes were up on a year ago, while 33% reported a fall. The resulting balance of +11% was weaker than retailers had anticipated (+32%) for July.

"Retailers reported an annual rise in sales and orders for the third month in a row, but the increase was far slower than firms had anticipated, confirmed Judith McKenna, chair of the CBI Distributive Trades Panel and Asda chief operating officer.

 "The unprecedented poor weather for the time of year did not help, but retailers also expect conditions to remain tough during August. With consumer confidence weak and wage growth remaining sluggish, the longer term outlook for retailers remains challenging."

In August, retailers expect both sales and orders growth to moderate further, with both expected to be effectively flat on a year ago (sales +3%, orders -1%).

As well as seeing slower growth, sales continued to be below average for the time of year (-14%), while, relative to expected demand, stock levels also rose (+21%, from +11% in June).

Data released last week by the Office of National Statistics (ONS) showed the UK fell deeper into recession in the second quarter, with a 0.7% drop in GDP the most in more than three years.