Retail sales slow in May, says CBI

The survey, conducted over the first two weeks of May, reported that sales were below average for the time of the year, down 19%.

The survey shows that 43% of retailers reported an increase in their volume of sales compared to a year ago and 23% said they had seen a fall.

Despite the increase in sales volumes, stock levels rose unexpectedly relative to expected demand, with the survey results similar to that in March.

Sentiment regarding the business situation for the next three months has also turned positive, up 3%, for the first time since November 2011 to 11%.

The majority of retail sectors saw sales increase, notably grocers, up 40%, non-specialised including department stores, up 65% and furniture and carpet retailers which enjoyed a 72% rise.

The number of people employed in the retail sector increased on a year ago, up 12%, for the first time since February 2003. In June retailers expect to continue recruiting more staff compared to a year ago.

Year-on-year price inflation in shops remained robust, but still below the peak seen at the beginning of 2011, up 73%. Retailers expect this to remain at a similar level next month.

Retailers expect sales volumes to grow again on a year ago in June and the business situation to be stable over the next three months, following expectations of a modest deterioration in recent quarters.

Judith McKenna, chair of the CBI Distributive Trades Panel and Asda chief operating officer, said: “It’s encouraging to see high-street sales up compared to a year ago, and that business sentiment about the next three months has improved.

“However, sales are still below the average for the time of year and the combination of high unemployment, slow wage growth and weak consumer confidence means that the retail sector is likely to remain under pressure in the short term.”

Barclays head of retail and wholesale Richard Lowe said: “With the Jubilee weekend ahead and a more seasonal weather forecast, shoppers have stepped back onto the high street in force and given sales a much needed boost. 

“That said, considerable headwinds remain therefore, consumers will continue to be cautious in their spending in the months ahead”.