The UK high street is having a difficult summer as retail sales fell for the third month running in the year to July, and the forecast for August is also weak, according to the CBI.

But its latest Distributive Trades Survey showed that the latest drop in sales was similar to the more moderate rates seen in May and June, and not as severe as the heavy falls seen between July 2008 and March 2009.

The survey revealed that, when asked about year-on-year sales volumes in the year to July, 32 per cent of respondents said that volumes had increased, while 47 per cent said they were down. The resulting balance of -15 per cent was better than expected (-21 per cent), although a slightly heavier fall is predicted in August.

Sales were said to be poor for the time of year by 32 per cent of retailers, which was worse than expected and more severe than in June, with a net 27 per cent of respondents expecting sales to remain below seasonal norms into August.

The three-month moving average of sales volumes, which smoothes out monthly peaks and troughs, remained negative, and is expected to worsen in August.

Stocks remain adequate in relation to expected demand, but the volume of stocks lay below its long-run average for the third consecutive month.

The volume of orders placed upon suppliers fell again, with 13 per cent of retailers reporting a drop in July, and 17 per cent foreseeing a decline in August.

Andy Bond, chairman of the CBI Distributive Trades Panel and Asda ceo, said: "Many retailers are having a difficult summer and no pick-up is expected in August. But the overall sales falls are not as heavy as we saw at the start of the year, and some retail sectors are reporting growth. The recent sharp rise in unemployment will worry many consumers, and is likely to constrain sales growth in the months ahead."

Sales volumes in the wholesale sector fell again in the year to July. Some 19 per cent of CBI respondents reported a fall was less severe than in June but a heavier fall is anticipated in August.

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