What: The CBI's August survey shows a sharp pullback in retailer-reported sales after July's six-month high, alongside improving investment intentions and slower job losses.

Why it is important:  The scale of the August reversal, alongside a brighter September outlook and stronger investment intentions, suggests retailers view this as a dip within an uneven recovery rather than a fresh downturn.

British retail sales softened sharply in August after their strongest performance in six months in July, according to the latest Confederation of British Industry (CBI) Distributive Trades Survey. The CBI's headline sales volume balance, based on retailers' assessment of annual sales volumes, fell to -48 in August, down from -26 in July.

Despite the downturn, the CBI expects a recovery in retail store sales in September. Sales expectations for the month point to an improvement to -22, the strongest reading since March.

Investment intentions also picked up, rising to -16 in August from a low of -52 in May. This was the strongest the indices had been since February 2024, pointing to a tentative re-opening of capital spending after a prolonged freeze.

On employment, the CBI said the retail sector shed jobs at its slowest pace since November 2025, a possible sign that headcount reductions are stabilising even as trading conditions remain difficult.

"Retail firms grew more downbeat in August as they grappled with sharply falling sales volumes. These weak trading conditions, which were echoed across the broader distribution sector, continued to weigh on retailers' investment and hiring plans," CBI lead economist Martin Sartorius said.

IADS Notes: The August reading sits within a CBI series that has been deeply negative throughout the year: the balance stood at -54 in June against -46 in May, with the three-month average at -56, its weakest since the series began in 1983 (Reuters, June 2026), while April had already delivered the sharpest fall in more than four decades, attributed to the Iran conflict, inflation and policy-driven cost increases (Financial Times, April 2026). Set against that base, -48 in August reads less as a new floor than as a reversion to the year's prevailing level after July's outlier of -26. The gap between survey balances and official measurement remains material, ONS volumes having fallen 0.5% in July while BRC value data still showed 1.3% growth (BoF, August 2026). The improvement in investment intentions follows a period in which capital commitments continued despite record-low sales balances, with John Lewis allocating £50m to five stores inside an £800m portfolio-wide programme (Press Release, June 2026). The slower pace of job shedding also carries a policy dimension, industry bodies having warned that a business rates increase would put more than 100,000 retail jobs at risk and stall store expansion (Retail Week, October 2025).

UK retail sales softened in August after strong July