Sales in the high street improved slightly in June, but retailers are expecting trading conditions to deteriorate sharply next month, new figures show.

The CBI's monthly trade survey showed that while 30 per cent of retailers reported a rise in sales in the first half of the month compared to the same period a year earlier, 39 per cent reported a fall.

This balance of -9 per cent is an improvement on last month's balance of -14 per cent and April's -26 per cent balance. Economists at HSBC had forecast a balance of 0 per cent, while Capital Economic had forecast -5.

An improvement in grocers sales as well shoes and leather goods helped boost overall sales, although retailers selling household goods suffered as the housing market continued to stall. Sales of clothing fell to their lowest since records began in 1983.

The CBI's findings are at odds with official data out last week which showed a 3.5 per cent surge in retail sales in May, powered by clothes sales. Analysts suggest that next month's official data will be much weaker as the downturn in consumer spending starts to materialise.

Vicky Redwood, of Capital Economics, said: "The boost to clothing sales from the better weather appears to have quickly passed, with clothing retailers reporting a record low in their annual sales growth. And the survey suggests that household goods retailers are still having a torrid time."

Retailers are pessimistic for the future, with the expectations for July falling to -7 percent, down from the plus 6 per cent forecast for June.

Clothes shops reported a survey record low in their year-on-year sales growth, and booksellers & stationers also fared poorly. Retailers selling homewares and other housing related goods such as furniture & carpets, hardware, china & DIY continued to report falling annual sales.

However, grocers, including supermarkets, had another month of strong year-on-year sales growth, with a balance of +67 per cent reporting an increase in sales, the highest since December 2005. Footwear and leather shops also reported sales growth.

Andy Clarke, the new chairman of the CBI's Distributive Trades Panel, and Retail Director of Asda, said: "High fuel prices and concerns about the economy have blunted consumer appetites, and those retailers linked to the housing market are continuing to endure difficult conditions."

"Grocers have had another strong month, and we are seeing people spend more in supermarkets as they focus on the essentials and also upgrade to higher value food ranges instead of having a night out."

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